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Describe your value proposition and transformation plan. (This is - basically - the heart of the proposal.)

This is an answer to a question from the 2022 Scottish Water Framework Tender: ''Digital Transformation Consultancy Services Tender''

Section Max Length: 12 x A4 pages

Why Read:

This section is worth a read as it is essentially the heart of the proposal as we lay out the details of our value proposition.

Here we go into significant detail about how we will carry out the cultural transformation that will lead to increased productivity.

We lay out our approach and promise for three key areas, Capital Projects, Operations and Maintenance, and Asset Management.

You can access the Google Drive folder here.

Introduction to VISION’s Value Proposition

''Please provide a Value Proposition detailing how you could deliver transformational change within Scottish Water based on the following opportunity areas and any others opportunities from your previous utility experience - Operational transformation; Leadership transformation; Culture change, management; Innovation & business strategy''. - Scottish Water

VISION Consulting has done extensive work with Scottish Water since 2007 including work in Operations (leakage), IT, and more recently Capital Projects, Leadership Transformation, and Culture Change. Our work in other utilities and industries has included developing innovations and executing business strategies.

Our approach to delivering organisation-wide transformational change is by first identifying the mood and culture of an organisation that is holding it back from reaching its true potential and then introducing culture change practices across the organisation to shift the mood to an alternative, more productive mood. We call this alternative mood a ‘counter mood’. In our work with Scottish Water, we have found that there is a reserved mood with an associated style of collegiality—where people strive to get along with mutual respect. This meant, people were respectful and collegial but always wanted to follow processes and examine all (even unlikely) options in order to avoid being wrong and to show respect for their colleagues and managers. In general, people did not want to make difficult judgements on their own or even with the vetting of a few colleagues.

Our value proposition to you is to introduce and embed tailored culture change practices at Scottish Water which will deliver significant operational improvements that will increase productivity, and at the same time transform the current culture to a culture of admiration with opportunity seeking, and transform your leadership so that Scottish Water line leaders can lead effectively in the new culture while preventing the old culture from slipping back. In addition to the broader leadership initiatives, within the scope of this proposal, we would specifically work with leadership in Capital Projects, Operations, and Asset Management to ensure the cultural change can be sustained.

What makes VISION unique is that we produce operational excellence, leadership transformation, and the expert execution of innovative solutions and business strategies by using culture change techniques that we have developed over the past two decades. Our view of culture is unique. Fundamentally, we view culture as practices wed together by a shared mood and style. Certain practices for decision making, handing off, evaluating performance, and celebrating manifest and stabilise the culture. To transform a culture, we develop new decision-making, handing-off, evaluation, and celebration conveying practices that bring with them the new mood and style. In Scottish Water's case, since we are marrying culture transformation with both efficiency and cost reduction, we will establish a new mood of admiration and opportunity creation in combination with new working practices that reduce cycle time and costs.

Innovation and Business Strategy:

Within the utility industry and Scottish Water, VISION has developed and implemented innovative solutions within capital projects to help teams ‘Get On-site in Half the Time’ and at 30% less costs and we will continue to extend this work to DV2 to ‘Get Off-site in Half the Time’ as part of our value proposition. We have experience in innovative collaborative solutions to project delivery called the ‘Integrated Project Delivery (IPD) model’ where all major parties share in the financial risk and reward for the overall success of the work, thus creating interdependence and successful project outcomes. We are actively promoting Lean Construction methods in the UK. Coupled with Commitment-based Management™ (CbM), this approach improves predictability of workflow on projects where a ‘Network of Commitments’ (rather than a published schedule) is the supporting mechanism for engaging the project teams in executing work and driving effective collaboration. We are currently running an innovative and strategic Combined Sewage Overflow (CSO) program where VISION, in collaboration with our strategic partner Indepen, is promising to enable, within 18 months, a sustained 50% reduction in sewage overflows by driving consumer behaviour change without the introduction of new penalties. We are starting with a pilot operation at Thames Water and in two representative communities.

The sections that follow give further details of our overall approach and the practices we will introduce to transform Scottish Water’s culture and outline our 24-month implementation plan to bring transformational cultural and operational change in three areas: (1) Capital Projects, (2) Operations and Maintenance, and (3) Asset Management.

Our Approach: Introducing Culture Change Practices

We transform cultures by shifting their pervasive mood and style. To do that we develop new conveying practices that deliver the new mood. (A ‘conveying practice’ is one that brings in the new mood and continually reinforces it.) In Scottish Water’s case, since we are marrying culture transformation with efficiency improvement and cost reduction, we will bring in the new mood of admiration with opportunity creation through conveying practices that also achieve cycle time reduction, cost reduction or both together. The following are the conveying practices we intend to introduce or refine and strengthen:

New Cultural Conveying Practices:

Handoff Practice - The purpose of this practice is to take care of the person you are handing off work to by negotiating to give them exactly what they want, handing off exactly in the time they ask, and constantly looking for an opportunity to do something better than what the person wanted. Our handoffs are, thus, promise-based, and open opportunities for clear accountability and feedback. They primarily convey admiration, but as people look for and discuss opportunities to do better, they also convey a style of opportunity creation. Good handoffs are essential for decreasing cycle times and thereby increasing efficiency.
Assessment Sharing – This is an unofficial, mostly peer-to-peer performance evaluation practice. We will facilitate assessment sharing among people to enable them to have candid discussions about new opportunities that will improve themselves, the work experience for others, and the costs and benefits of what gets done. It will create new opportunities to remove interpersonal friction and in doing so, bring more admiration amongst colleagues. Assessment sharing reduces cycle times as people get what they want the first time. We also ask people to make assessments of the financial value of the work they are doing to determine if it is worth doing. This leads to cost reduction.
Coming to Resolution – We introduce this practice to overcome the inefficient practice of delaying decision-making (analysis paralysis). This practice helps people come to agreement in ways that enable them to bring admiration and respect to each other. Because virtually everyone but the decision-maker adopts the role of trusted advisor, this practice conveys admiration. But if done well, the incisive, respected decisions will open precisely the time necessary to engage in opportunity creation. Here we seek to take all the time spent exhausting unlikely options and spend that time inventing new ones. Coming to a wise incisive decision quickly not only reduces cycle times and cuts costs but also opens space for opportunity creation.
Regular Coaching of Direct Reports – This is another unofficial performance evaluation practice. We will coach managers to coach their direct reports on a regular schedule. The coaching will focus on skill improvement, opportunity creation, learning to learn, mood management and also making and keeping good commitments. With this practice, Scottish Water will essentially have managers coaching like VISION coaches. This is the key practice for conveying admiration. So long as the coaching includes making people aware of costs, this practice also leads to cost reduction.
Our ‘Horse Trading’ Practice - a decision-making practice focused on building admiration and trust between a client company and its outside suppliers. In this practice, mid-level managers from Scottish Water and its suppliers come together to discuss how they will be evaluated internally within their own organisations and agree on how they will take care of each other so that people on both sides receive high internal evaluations. This practice conveys admiration and sometimes opportunity creation. Overall, it keeps people from working at cross purposes and thereby cuts cycle times.

New Practices under Consideration:

Weekly practice of truth-seeking for innovation – an exploratory, brainstorming practice where managers investigate their organisation to find new truths—causes, consequences, and so forth—that can be channelled into opportunity creation and innovation. The practice includes bringing the new findings to the team and developing an innovation to improve operations. This practice grows opportunities.
A distinct celebration practice that celebrates collaboration—we would look to design this with our Scottish Water teams at the beginning of the engagement.

Our 24-Month Implementation Plan

The following pages describe our 24-month plan to implement VISION’s culture change techniques to transform Operations and Leadership in the areas of (1) Capital Projects, (2) Operations and Maintenance, and (3) Enterprise Asset Management Systems Implementation.

The sections start with an introduction and our understanding of the opportunities or challenges in the three areas, we then make a clear commitment of the benefits we will bring to each area and the approach we will take to fulfil our promise, and finally outline a high-level 24-month implementation plan to deliver our commitment.

CAPITAL PROJECTS

Introduction

In the last three years at Scottish Water, VISION has been successfully working in Capital Investment and in the PPD (Plan, Prepare, Deliver) area primarily in DV1. We designed a bespoke process for Scottish Water that incorporates Commitment-based Management™ principles, the best thinking within Lean Construction methodologies, and Agile ways of working including Scrum practices. We have reduced the time it takes to plan, prepare, and start on site to half the time that it had taken Scottish Water in the previous regulatory period SR15 and built a “Get to Site in Half the Time” brand which has gained momentum and is now being developed in DV2.

Key Opportunities and Challenges within Capital Projects

Cost Management: Capital Projects are not being delivered within budget, and the emphasis now is on value for money while using the same Scottish Water resources. VISION’s practices and coaching are turning the tide on developing cost management capabilities.
Governance: The recent McKinsey report speaks of reducing effort and better coordination in governance to reduce time to site and costs. VISION has proven expertise in this area.
Culture: A culture of over-engineering projects--using onerous compliance practices that do not reflect the complexity--causes significant waste. VISION currently coaches teams to treat complex projects with great care and to avoid treating simple projects as complex ones.
Regulatory Commitments: By establishing big goals linked to regulatory commitments and building VISION’s signature tool called the Networks of Commitments around that goal, all teams will begin to work collaboratively so that large regulatory commitments can be met.
Operating in Silos: VISION, working with Scottish Water, have already introduced collaborative practices, across functions and partners to break down silos. With Scottish Water, we have aligned the governance structures between Scottish Water and its Partners.
Leadership and Decision-Making: Process can sometimes stifle decision-making, and Scottish Water sees that this is a persistent issue with its “one size fits all” approach. VISION’s Coming to Resolution practices improve decision-making significantly.
Innovation and Business Strategy: In big organisations, teams can sometimes stick to processes without questioning its value and wait for leadership to fix what is broken. VISION asks those those on the ground with the greatest insights to innovate better ways to execute business strategies.

Our Promise

Our promise on capital projects is to take the good work and success that has been demonstrated in DV1 (50:30 results) and bring it to DV2 to produce similar results. We promise to get projects off-site in half the time and for 10% lower cost while meeting the net zero emissions targets.

Our Approach

We have made Agile working practices yet more agile by adopting many Lean Construction methods joined with Commitment-based Management™ (CbM). We use this combined approach to tackle issues of Loss of Direction, Loss of Control, Lack of Sustainability, Outdated Behaviours and Capabilities, Fear of Change and Risk, and Lack of Focus. The commitments in an organisation are usually implicit. Making them explicit and adjusting and aligning them creates huge increases in efficiency, particularly in Lean wastes. Lean’s wastes of waiting, moving equipment, employee motion, and non-utilised talent all impede resource utilisation. CbM offers two main solutions to these Lean wastes. (1) It pushes final scheduling to people on the frontline, who can use their local knowledge of, for instance, traffic and parking. With personal promises to customers and managers frontline staff take ownership and fulfil commitments. (2) We use CbM’s Coordination Loop to get clear on the Network of Commitments. We build a Pull Plan (which is a step in the Last Planner system) and a delivery strategy across the entire team. We use Scrum methodology as a subset of Agile thinking and Kanban boards.

Culture Change Practices focused on skills and behaviours: In parallel with the above, we introduce the disciplined use of Language for Action, identifying and shifting negative moods, Assessment sharing for improved coordination, and Scrum methodology for escalating breakdowns. We introduce the role of a Resolver, Coming to Resolution practices, and meeting practices called Meetings that Matter to help managers make decisions faster.

Capital Projects: 24-Month Plan

(1) Continue to Enhance and Embed the DV1 Operating Model

We are currently implementing Scrum and CbM practices with the Integrated Wedge (gate 50 to gate 70) teams to get their projects achieving the 50:30 goal. Once this is established, we will move to the ‘Prepare’ phase teams. The focus is to embed a new design for Lean Governance. As the recent McKinsey reports states: Lean Governance (reducing governance and getting clear on project outputs) is a significant opportunity. We will design appropriate Lean Governance and project outputs to significantly reduce effort. This new governance will include decoupling certain deliverables from IPAC and building reference libraries so that teams can refer to best-case examples. We will move from major programme type to programme type and will mobilise the change out to the delivery teams via the DV1 and DV2 project teams.

(2) Deliver a Breakthrough Pilot in ‘Deliver’ (Part of PPD) Phase

We will begin a 3-month pilot construction project in DV1 (Sep or Oct) to “get off-site in half the time” and at 10% less cost. We will design new practices and tools to test and demonstrate what is possible before scaling the approach. Partnering with Scottish Water teams, we will place on the ground a VISION team which is highly skilled in Lean Construction, CbM, and culture change practices. The team will produce a breakthrough that demonstrates what can be achieved. Scaling the approach: Following the 6-month pilot, we will expand and roll out the approach to 4-5 projects and introduce the new practices to the Construction Partners while building a 3-year programme to implement the practices across the entire DV1 and DV2 programme. The application and adoption of these practices will be key to success. This programme will unlock delivery capacity and be a key tool in achieving the ramp-up goals.

(3) Continue to Design and Expand across Programmes in DV2

DV2 has adopted the goal of ‘get to site in half the time and for 30% less cost’ (50:30) . VISION is currently designing and piloting new execution pathways for Auto shutdown, Disinfection, Reservoirs and SCADA programmes. The goal is to complete these projects and then by the end of the year have each region adopt this new way of working.

(4) Embedding the Practices and Sustaining the Results

For DV2, VISION has proposed a further 12 months of work to embed the new ways of working across the teams. During this time, we recommend Scottish Water invest in its Mobilisation and Coaching capabilities with VISION’s support. VISION has successfully helped other clients develop these capacities in the in-house teams to assure long term sustainability.

Capital Projects - 24 month Plan

OPERATIONS AND MAINTENANCE

Introduction

We expect that Scottish Water will want to automate the Operations and Maintenance processes as much as possible using the new Enterprise Asset Management environment, and – as the benefits of big data begin to appear - put an increased focus on preventative maintenance. In SSE, we worked with groups using the new Enterprise Asset Management system (Maximo). At Cadent Gas, we worked with their automated processes including their centralised work allocation system, which was being poorly adopted in the field. At Cadent Gas, we improved field force performance on the ground by 50% (measured in jobs per day) and reduced costs by at least 10%. We achieved similar outcomes at SSE Networks. We did this by implementing a new approach to planning along with new working practices that increased buy-in and adoption of the new processes. The change in planning moved accountability for the day-to-day scheduling of work from the central planning unit to the local teams doing the work. Just as critically, we developed in the local teams an entrepreneurial ownership mindset to the maintenance and operations of their assets. With that mindset, field team members looked to maximise the value of their actions.

Our Promise

We promise to improve field force productivity by 20% and reduce costs by at least 10%. We will do this by taking the key elements of the approaches we successfully applied to Cadent Gas and SSE and use our on-the-ground experience of Scottish Water to customise those approaches in order to deliver breakthrough productivity improvements in Operations and Maintenance in Scottish Water.

Our Approach

We will begin by developing a compelling story with the directors about why transforming the performance of Operational teams is required and the value of doing it. Simply asking to improve productivity, which can be interpreted as merely being asked to work harder, will fail. VISION will draw on its recent experience of developing successful performance improvement stories for our other clients.

We propose to start working in one region with Inspections and Maintenance to create a 12-week breakthrough that clearly demonstrates the performance improvements and then, in a second 12-week period, scale that work to all of Operations in that first region and thereby establish a new way of working in a region.

With clear improvements visible on the ground and with the new way of working established in the first region, we will focus the next 6 months on embedding the new practices in the second region. We would do this jointly with Scottish Water mobilisation teams to prepare them to sustain the changes and complete the rollout. Finally, with the changes well embedded in the second region, we would hand over to the Scottish Water teams to complete the rollout in the final two regions in 9 months. During that time, we will provide a light-touch Quality Assurance role.

To reduce implementation costs across this stream and the Enterprise Asset Management implementation stream and to accelerate benefits realisation, we recommend that Scottish Water select the same first region for both streams.

In parallel with the initial 12-week breakthrough stage, we would also establish a baseline against which the performance improvements would be judged and bring visibility to the numbers and types of jobs completed, job costs, and teams’ utilisation and performance.

Mobilising a New Way of Working

To establish a new way of working that would then be embedded in all regions, we will first look at the team roles and the Network of Commitments required to deliver the work done by those teams. On that basis, we will identify gaps and work with the teams to customise the working practices to address those gaps. We would look to harness front-line teams’ suggestions for improvement and thereby have them as a critical partner in making the change. VISION teams would then mobilise the customised working practices first in the initial region to create the breakthrough and then in the remaining regions jointly with Scottish Water Mobilisers whom we will train on the job during the implementation of the first two regions..

Based on our experience with Maintenance and Operations teams in SSE and Cadent Gas and our on-the-ground experience with Scottish Water, we expect to start with the following practices, before moving on to several other practices, including the Operations Review and Meetings that Matter:

Daily Huddles with the Operations and Maintenance teams to: (1) gain commitment to the day’s work schedule or (2) adjust, if necessary, (3) spot opportunities to share cross-functional resources, (4) catch and fix what might otherwise block the day’s work, and (5) line up additional help that team members might ask for.

Rolling Planning to continuously plan work on three timelines: the next 6 weeks, the next 3 weeks, and the next week. Typically, the Rolling Planning process would schedule the central and field teams to handle the following kinds of work:

Responding to emergencies and restoration of supply (wastewater and clean water)
Planned maintenance, including preventive maintenance and maintenance based on the condition of the asset
Work required because of commitments made to the Regulator and in the annual plans

Resolver Role and Process will be instituted to catch breakdowns in the automated and manual processes and then quickly put the process back on track. For instance, we expect such breakdowns when poor asset data quality triggers a processing failure in the new Enterprise Asset Management system. Equally critically, this Resolver role provides key requirements and design insights into the ongoing design of the new, automated systems.

*Dovetailing with the Enterprise Asset Management stream: The Rolling Planning and Resolver practices will not only drive productivity improvements but also will mobilise the automation changes introduced by the new Enterprise Asset Management system in order to accelerate adoption and benefits realisation. We describe this acceleration in the next section.

Operations and Maintenance - 24 month Plan

ASSET MANAGEMENT SYSTEMS IMPLEMENTATION

Introduction

We understand that Scottish Water is making a significant investment in an Enterprise Asset Management system that will transform how asset management will be done at Scottish Water. We expect that the implementation of the new system will focus on (1) Asset Planning to meet the commitments Scottish Water makes to its Regulator. (2) Operations, Maintenance and Replacement to support the planning and day-to-day scheduling of regular maintenance work on the assets, preventative and asset-condition-based maintenance, emergency repair work and lifetime planning of assets for replacement. (3) Reporting and Analytics, where the system will aid in financial and regulatory reporting and be used to work with the extensive analytics that will come with Scottish Water’s digital and ‘big data’ strategy. As part of IBM’s recent Maximo proposal to Scottish Water, we examined with IBM how VISION could significantly accelerate the mobilisation to deliver the project faster, more easily, and without the breakdowns we’ve seen in other asset management implementations. Our proposal derives from that exploration.

Our Promise

We promise to halve the time it takes for Scottish Water to realise the business case benefits of the Enterprise Asset Management implementation and reduce project costs by 15%.

Our Approach: Mobilise-First Approach

Using our on-the-ground knowledge in Scottish Water along with experience implementing new working practices in SSE, we have developed an accelerated implementation approach called the Mobilise-first Approach. This approach puts the design of new practices first, emphasises taking the software solution ‘as is, supports coming to decision quickly using a Pareto analysis on which asset classes will provide the highest return, mobilises the new practices in the priority asset classes, and only then turns to the configuration specifications based on what has been learned about value creation from the new practices. This way, we build the productivity improvements in from the start, win hearts and minds on the ground, and make the Enterprise Asset Management system one that supports work rather than changes it. We believe if Scottish Water takes this practice-based approach to implement the new system, it will dramatically simplify and reduce the customisation, reduce the timeframe for implementation, and accelerate the delivery of benefits. The five key elements of our mobilise-first approach are:

(1) Buy-In from the Ground Up: From day one, we will establish the new Enterprise Asset Management system in its role of supporting the key business functions: Asset Planning, Operations, Maintenance and Replacement, and Reporting and Analytics. We will work with the central groups and with local Operations leadership to identify jointly the priority assets that we will work with first. Then we will turn to the Planning and Reporting processes that are required for those assets. Finally, to guard against a ‘them and us’ attitude emerging, we will embed the mobilisation team, so they work alongside the Operations teams as partners.

(2) Core Working Practices: We will drive cultural change, performance improvement and adoption of the technology by introducing the following core working practices that will improve productivity and start to deliver the business benefits early: (1) Operations Review, to manage the promises made on productivity improvements. (2) Prompt Decision Making, based on the existing Scottish Water practice of Meetings that Matter, to ensure fast, careful decision making. (3) Rolling Planning, to introduce an Agile style to planning. (4) Handoffs Aided by Resolvers, to ensure work that spans multiple teams is delivered effectively and is not delayed or stuck. (5) Learning Teams for Design, to incorporate into the emerging design the feedback received from Operations and the Implementation teams.

*Dovetailing with the Operations and Maintenance stream: As noted in the earlier section, we recommend starting the asset management mobilisation stream in the same first region selected for the Operations and Maintenance stream, to reduce costs by sharing resources and accelerate adoption and benefits realisation through greater integration across streams.

(3) Focused Project Team: We will work with the key stakeholders to set simple operational and transformational goals that are tied to delivering the business case for the new Asset Management system. We will work with the implementation teams to build their commitment to those goals by jointly developing with them a detailed approach and plan that will deliver those goals.

(4) Agile Working Style: We will introduce VISION’s Design in Action approach to tease out the functional design, asset data design, and process design with the software implementation team in 1-month iterations and then inform the design of the customisations done by the Maximo software implementation team. We will implement Commitment-based Management™ across the Implementation, Operations, and Planning teams to improve handoffs and resolve breakdowns fast. To look after what we expect will be messy and incomplete asset data records, we will deploy Resolvers to handle and fix breakdowns caused by poor asset data. We will also use these Resolvers to handle the end-user stress that is likely to arise from an iterative delivery style.

(5) Compact Team Structure: We propose keeping the core management team size to 8-9 people. The core team would be drawn from Scottish Water, the Maximo software implementation partner, and from VISION. We advise that it include the following roles: Programme Director from VISION who is responsible overall for the successful implementation of the business changes and the adoption of the new enterprise asset management system. Programme Manager who is responsible for the day-to-day management of the programme. Technical Director who is responsible overall for developing the design of the software solution in an Agile manner and who will work jointly with the Maximo Lead Architect & Designer and the Lead Process Designer (see next) to set the solution strategy and guide the customisation. Lead Process Designer who is responsible overall for the design of the functions, roles and practices that will be required to deliver the business case’s benefits. Asset Management Industry Expert who will develop the asset management strategy and jointly design the asset structures with Operations and other key stakeholders, such as Regulatory Reporting. Senior Mobiliser who is responsible for mobilising the new working practices. Senior Coach who is responsible for introducing the Commitment-based Management™ practices and behaviours. Maximo-specific Roles, for example, Maximo lead Architect & Designer and Maximo Implementation Manager.

Additional Support Roles: The core team will be supplemented as needed by senior individuals from key central functions including the People Department, Finance, and Compliance.

In the list above we expect the roles would be played by VISION staff or Scottish Water staff who are experienced with our approaches. The exceptions are Maximo-specific roles, for example, the Maximo Lead Architect & Designer, which we expect would be played by the individuals from your Maximo implementation partner.

Asset Management - 24 month Plan

Key Information

Title: Describe your value proposition and transformation plan. (This is - basically - the heart of the proposal.)

Topic: Cultural Transformation

Keywords: Scottish Water, Tender, Value Proposition, Transformation, Tender Response, Proposal, Utility Experience, Operational transformation, Leadership transformation; Culture change, Innovation & business strategy

Type: not yet specified

Date Produced: June 2022

Additional Details

Scoring Percent: 20%

Max Length: 12 x A4 pages

Writers: Jennifer Cassidy & Reena Sequeira

Reviewers: Charles Spinosa & Peter Luff

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