Felicity Green examines a case study from the utility sector that demonstrates how sometimes the most powerful thing you can do is get out of the way of progress.
As the world rapidly changes, boards and executives across all sectors recognize the need to center innovation at the heart of strategic thinking. Acknowledging the need to innovate is one thing, but actually successfully doing it can seem an elusive pursuit.
This Strategy Spotlight explores the case study of Yarra Valley Water (YVW), a utility company with a track record in social and environmental innovation.
Managing director Pat McCafferty experienced a now somewhat rare career path, having spent his entire working life in the water sector. Starting in a frontline position in customer service aged 17, Pat moved up the ranks, adopting a range of different roles throughout the decades, witnessing the industry go through multiple reforms, where his diverse skill set provided him with leadership opportunities across a wide variety of functions.
Pat’s industry experience, as well as obtaining a degree via night school, an MBA, overseas secondments, multiple leadership programs and a love of sport all contributed to the leadership style and philosophies that he champions from the helm.
But the question still begs, “What’s in the water over at YVW?” How does an organization retain a strong business model, reduce costs for its consumers, support those experiencing hardship, be on track for net zero by 2025, be an industry leader in gender and First Nations representation on its board and among its executives, and demonstrate , through a number of live initiatives, the possibility of a circular economy. Quite simply, it boils down to having a clear purpose, a constructive culture, and empowering staff to bring ideas to the table.
Let’s start with purpose. Pat reflects it was the millennium droughts that really forced the water sector to have the “who are we?” conversation, and consciously tie its role back to the essential nature of water, and how everybody has a right to its access. From that point, community and sustainability have been front and center of strategic decisions at YVW (epitomised through the establishment of the Thriving Communities Partnershipa not for profit aiming to see everybody have fair access to the modern essential services they need to thrive in contemporary Australia).
The purpose statement is not just a lofty sentiment that sits separate from decision-making and evaluation; YVW has adopted a number of mechanisms to truly embed it into strategy across the organization. YVW publishes a People, Planet and Prosperity report, which measures the organization’s activities against the United Nations Sustainable Development Goals (SDGs). It also has an integrated profit and loss statement that evaluates the social, environmental, human and economic capital against the SDGs, in order to identify blind spots. This is an authentic accountability mechanism to ensure there aren’t any say/do gaps between the purpose and actions of the organization.
Purpose sets the frame at the top for strategic choices, but culture underpins the behavior and provides support from underneath. To create and nurture an empowering and supportive culture, Pat consistently uses Human Synergistics diagnostic tools and strategies to keep a pulse on the state of the organization’s culture and develop approaches to increase inclusion and positivity. In essence, he espouses putting people in jobs that align with their values, and then getting out of the way.
Which leads us to the third piece of the innovation puzzle; empowerment. When the vision and strategy are clear and the culture is supportive, people understand the impact being sought, that is, they’ve been given the why and whatbut not the how. Innovation at YVW is driven by creating space for individuals to figure this out themselves. They are encouraged to identify problems, connect with their network and try new things. YVW has seen the fruits of this approach in initiatives across social procurement, Pride in Water and award-winning citizens’ jury engagement.
A recent example of this approach to innovation is the Wollert community farm, the brainchild of one YVW employee, who leveraged their relationships and a small investment to create a win, win, win, win initiative. In a nutshell, YVW has site housing a sewage treatment plant and recycled water facility, located in a growth corridor on the busy hume freeway. YVW also established a food waste to energy on the site, processing food waste that was intended for landfill and converting it to renewable energy. The excess energy generated is fed back to the grid, Enter Melbourne Polytechnic, who wanted to train people in horticulture and sustainable agriculture but needed a site. Add in Whittlesea Community Connections who wanted to provide more food for the vulnerable.
In response, the Wollert Community Farm was created, with the ultimate vision of people being trained in horticulture and sustainable agriculture, with indigenous planting guides, demonstrating a model of economically viable peri-urban farming. This was not a top-down strategy designed in the boardroom. It was developed by an on-the-ground staff member who understood the different problems people were trying to solve, and was empowered to design a collaborative way to address them and create multiple value proposals.
Pat shies away from the legacy question, but he does admit he often asks himself “will I have made a positive difference in my time?” The outcomes and impact of the innovation at YVW makes the answer to that question pretty clear.