In an Expert Focus article for Waterbriefing, Brendan McAndrew, Principal Consultant and technical lead at MWH (now part of Stantec), discusses how water companies can ensure their services are resilient enough to meet customer and regulatory expectations.

Brendan McAndrew: Anyone involved in the provision of essential public services can’t have failed to notice that resilience is fast becoming the new watchword. It reflects underlying concerns that such services are vulnerable to disruption due to sudden shocks or long-term stresses which service providers are ill-prepared to deal with.

In the regulated water sector in England and Wales, resilience has attained greater prominence following the introduction of a statutory resilience duty for Ofwat under the 2014 Water Act. Ofwat’s objective is to secure the long-term resilience of water supply and sewerage systems in the face of environmental pressures, population growth and changes in customer behaviour and to ensure that companies take steps to enable them to meet the long-term need for water and sewerage services.

The relative rarity of significant or extensive service failures could be seen as evidence of underlying resilience in the sector. However it is also possible that we have been fortunate that the conjunction of rapidly growing external pressures, a complex and evolving asset base and constant organisational change in the drive for efficiency have not yet conspired to produce such service failures.

A highly resilient water company would be able to answer the following questions with an unequivocal ‘yes’

• Do we have adequate visibility and awareness of all significant pressures which have the ability to impact on our services?
• Do we understand the level of vulnerability of services across our ‘value chain’, to the impacts of such pressures?
• Are we confident in our capability to maintain or restore service in response to those impacts, in a way which our customers would consider to be acceptable?

The reality for most companies is more likely to be a qualified ‘yes’ underpinned by good faith and untested assumptions. In responding to the current regulatory challenge around resilience, water companies should move to a position where they can at least say, ‘we know where we stand with each of these questions and we have plans in place to ensure that we achieve the levels of resilience that our customers expect’. 

Defining resilience

Given the interest in resilience within the water sector, a common understanding is important but presently there is no agreed industry definition. Some more recent ones offered by various UK bodies include:

• the ability of an organization to anticipate, prepare for, and respond and adapt to everything from minor everyday events to acute shocks and chronic or incremental changes
• the ability to cope with, and recover from, disruption, and anticipate trends and variability in order to maintain services for people and protect the natural environment, now and in the future
• the capacity to maintain essential services under a range of circumstances from normal to extreme

These definitions all consider trends and incremental change alongside more dramatic and extreme events, challenging the common perception that resilience is solely about emergency planning and disaster recovery. The latter two definitions also emphasise service resilience, rather than a narrower focus on asset resilience to which the industry has become accustomed.

In adopting this broader view of service resilience it is important to recognise the wide range of pressures to which services need to be resilient, including population growth, drought and flooding; extreme weather events; land use and catchment pressures; power supply and communications reliability; skills and organisational capacity; supply chain capacity and capability and changing environmental and public health standards.

Understanding how the services provided, as defined by companies’ performance commitments, can be impacted by these pressures is central to understanding service resilience.

Whilst being mindful of regulatory expectations, ultimately it is for each water company to define resilience in its own terms, in a way that reflects local environmental and societal priorities and takes account of customer expectations.

The service resilience focus requires consideration of the complex interaction of asset systems; catchments and organisations (people, systems and processes) in resisting and responding to a range of external pressures and stresses. It requires a cross-functional approach which is often at odds with the siloed organisational structures and business processes within water companies. Changes to processes and business structures may be required.

Building resilience

One of the tools that can help to bring some structure and focus to the challenge of assessing and building resilience is the BSI publication, Guidance on Organisational Resilience (BS 65000 2014), which sets out six key steps required to build resilience. The key steps are:

• Direction – has the business  identified the pressures which are likely to impact on service now or in the future and defined service resilience objectives?
• Awareness – are pressures monitored and reported at an appropriate frequency and granularity?
• Alignment – are resilience objective cascaded thorough the organisation with appropriate policies and targets for all functions and disciplines?
• Learning – learning from incidents is important but equally important is ensuring time and space to think about what might happen; think the unthinkable; capture near misses; listen to experts and learn from other sectors
• Strengthening – learning isn’t beneficial if it doesn’t lead to action; there must be robust processes in place which allow resilience improvements to be evaluated; promoted and adopted by the business, creating a business-wide culture of resilience thinking
• Assuring – the business should openly test and challenge whether existing risk mitigations such as contingency plans are robust and reliable 

Building a culture of resilience

For some, undertaking an in depth assessment of resilience may feel like opening Pandora’s Box: there is a risk of unearthing a long list of pressing risks for which there will be insufficient funding to address. In the absence of an investment solution for all identified risks, effective incident management will continue to play a key role in providing service resilience.

Some companies will take confidence from the fact that they have written contingency plans in place to mitigate such risks. However, all too often such documents are untested, out of date and so detailed and unwieldy as to be of little use. Using such documents in a crisis could be likened to consulting the Haynes Manual for your car when the brakes have just failed in the fast lane of the motorway.

Developing the skills and capability to deal with incidents, through simulated events and capturing and sharing lessons from real events is likely to deliver greater improvements in resilience than investing in lengthy written plans.

One of the biggest challenges for companies will be to develop a culture within which the imperatives of operational efficiency do not preclude the time to think; reflect; raise concerns; challenge prevailing wisdom and drive changes which will ultimately lead to improved resilience.

The Hatfield rail crash in October 2000 and the explosion and fire at Buncefield Oil Terminal in December 2005 (the worst in peacetime history) both happened when known asset faults and vulnerabilities were not addressed. In both cases a culture of keeping the network or process operating was the primary focus. As a result, process safety did not get the attention, resources or priority that it required.

There is a great deal of knowledge and wisdom within water companies, in particular amongst those who operate and maintain asset systems which if effectively harnessed can help to build resilience. That doesn’t mean writing it down or capturing it in a database. Instead, it’s about creating space in the schedule for regular structured forums which highlight issues; share experience and identify needs or solutions which feed into the wider investment planning or business improvement processes.

It is also vital to ensure that investment planning and approval processes can accommodate investment cases to address future pressures which have not yet manifested themselves in service failures especially where the impacts of such failures may be significant. Customers are likely to consider that being left vulnerable to known resilience risks is unacceptable and are likely to support efficient investment to reduce their exposure to such risks.

There can be a tendency for such investment cases to be ‘trumped’ by seemingly more urgent cases which are subject to current service failures. Some needs may remain on the company’s risk register for years without ever making the cut.

The resilience objective requires this cycle to be broken and for such cases to form part of a long-term plan to progressively improve resilience potentially over multiple AMP periods.

Conclusions

The current focus on resilience provides the water industry with challenges and opportunities. The challenge will be to demonstrate to Ofwat and to their customers how they are ensuring service resilience, this may involve asking searching questions with uncomfortable answers. The opportunity is to embed long-term planning and operating policies which harness the knowledge and expertise of the sector to secure exceptional levels of service reliability.

Brendan McAndrew is a Principal Consultant at MWH, now part of Stantec. MWH is supporting clients across the UK to develop practical approaches to building resilient services, enabling them to meet the regulatory challenge and secure the trust of their customers now and into the future.