Future Leaders: Change and Transition

Scottish Water’s transformational journey with Oxford Saïd, written by IEDP’s Developing Leaders

Scottish Water holds the unusual position of being a public sector water utility in what is broadly a private business sector in the UK. This means that the organisation tends to see itself positioned at the market-oriented end of the public sector, being highly customer focused and with a strong eye on earning commercial returns to reinvest in the business infrastructure, at the same time as being part of the fabric of Scotland’s publicly owned infrastructure.

While ultimately responsible to the Scottish government and its ministers, who set direction for it in regulatory periods, the business is run on a traditional corporate structure with a Board and Executive Leadership Team. Employing around 4,000 people across Scotland, it had operating revenues of approximately £1.2bn in 2018/19 and generated a surplus of £67m, after expenses and over £660m of investment.

Douglas Millican, who has been CEO since 2013, has a clear vision of the organisation’s values which is neatly encapsulated in its strapline 'Trusted to serve Scotland.' This concise phrase highlights the key human qualities of ‘trusting’ and ‘serving’ as well as making clear that this applies to individual customers, business customers and whole communities.

The talent bottleneck challenge

The organisation has been on a transformational journey since it was formed in 2002 from three regional water authorities.

The initial challenge was to bring those cultures and structures together into a cohesive business. This was achieved remarkably effectively, which may well be testament to the fact that people come to work for Scottish Water with a clear understanding that they have a vital role to deliver to ensure that the Scottish population are served well. Water is generally less of a scarce resource in Scotland than in many other parts of the world, but should it fail to be delivered continuously, efficiently and effectively the consequences are immediate and extensive, so the responsibility to maintain a high level of performance is felt across the organisation.

While Millican and his Board may see the organisation as a public service with a high focus on customer satisfaction, the reality is that Scottish Water tends to attract people with strong functional expertise, whether that be engineering, scientific or around legal and finance skills. Paul Campbell, Head of Learning and Organisational Development, describes how there was often a bottleneck of talented technical graduates who were ready to move into management roles from a career perspective, and although some may have completed graduate development programmes there was no broad benchmark to measure potential against, to see who might be best placed to take on leadership roles at any specific moment.

It was from this starting point that the Scottish Water ‘Future Leaders’ programme began to evolve.

Initial ripples of design

Campbell notes that to start the process of assessment Scottish Water turned to the global leadership consultancy YSC, who brought their ‘JDI’ Model of Potential assessment.

The JDI Model of Potential assesses individuals on their likely ability to perform higher level roles based on underlying traits individuals display that are grouped into three strands: Judgement, Drive and Influence.

The JDI Model of Potential

JDI model of potential

YSC's model identifies leaders with the greatest potential to deliver on an organisation's targets and strategy.

The attraction for Julia Stevenson, Strategy, Leadership and Resourcing Lead at Scottish Water, in using the JDI assessment is its focus on personal qualities rather than learned competencies, so highlights ability that can be developed rather than any existing expertise in management. With many potential leaders coming from technical backgrounds where they may have had little opportunity to develop their leadership practice this was an important distinction to be aware of, in order to ensure that they were identifying those people with the greatest opportunity to develop the most valuable leadership talent.

In the first cohort for the Future Leaders programme line managers were asked to nominate individuals for assessment, however in the two subsequent cohorts – once the programme had gained wider awareness across the employee population – assessment has been through self-nomination, although line manager and senior talent spotter endorsement is also required. Typically those nominated were those with high Judgement scores coming from technical / specialist roles; and those with high Drive scores from the operational services side of the business.

Creating the learning bridge

With an eye on the familiar 70:20:10 workplace learning formula, an external content and thought-leadership provider was sought to deliver the 10% of formal knowledge exchange. Stevenson and Campbell surveyed a range of providers and went through a procurement process with ten organisations (six business schools and four specialist development providers) before a final shortlist of two business schools and one other provider were interviewed. Oxford Saïd were the selected partner, led by programme director Steve Mostyn. In the shortlist process, providers were asked a series of questions around how they would tailor a programme to meet with the overall aim of the programme as outlined by Scottish Water:

  • To equip participants with the knowledge, skills, behaviours and experience to be able to make significant leadership transitions within the short to medium term (2-3 years).

Campbell and Stevenson recall that the Oxford Saïd presentation stood out for their understanding of the particular circumstances and needs of Scottish Water and their clear willingness to adapt and curate content and select thought-leaders to fit those specific needs. 'Oxford Saïd’s tailored responses were just more customer-focused than anyone else’s' says Stevenson, and this gave them the greatest confidence that they would build a close working relationship with Oxford, customised to their evolving needs.

Oxford Saïd’s tailored responses were just more customer-focused than anyone else’s

Julia Stevenson

Strategy, Leadership and Resourcing Lead, Scottish Water

The Oxford knowledge pool

In particular Oxford Saïd was also able to draw on the depth of Oxford’s wider university knowledge base, and inform the content the business school would provide with expertise drawn from the Oxford Centre for Social Entrepreneurship, which could provide insight and solutions on commercially and socially valid solutions to environmental deterioration issues, the Oxford Water Network which could bring water science excellence, and the Oxford Martin School that explores emerging global issues from a cross-functional perspective. These inputs helped to inform the programme design to meet Scottish Water’s objectives.

The programme flow

This collaboration started immediately from Oxford Saïd being engaged.

The initial scope of the programme was set by the strategic themes set-out by the Executive Leadership Team (ELT) of Scottish Water with whom the Oxford team had extensive discussions to ensure the programme was closely aligned. The programme leads were clear though that the emphasis for the participants would be determinedly on skill application over acquisition; success was to be measured in how new behaviours and mindsets would be actively brought back into the business. To do this the design of the programme, and indeed part of the provision made available to those who applied but were unsuccessful, stressed the importance of conversation and dialogue. Assessments early on in the programme acted as catalysers for these conversations, and dialogue within their action groups and coaching was integral to the programme structure.

The Oxford Saïd faculty’s role was to provide the thought-leadership and knowledge exchange that would be the foundation of the programme content and that would be the only times the whole participant group comes together during the programme. The modules are delivered in four two-day sessions at a modern, purpose-built event space on Stirling University’s campus in the shadow of the National Wallace Monument.

Future Leaders programme design

Scottish Water's Future Leaders programme design

Each module was led by Oxford faculty who have had significant experience beyond academia. The opening session, 'Leadership and me – exploring adaptive leadership' was led by Irwin Turbitt, a former Assistant Chief Constable in the Police Service of Northern Ireland and now also research fellow at the Harvard Kennedy School, and Kathryn Bishop, Chairman of the Welsh Revenue Authority and Accenture consultant, who now leads several Oxford programmes. The ‘knowing yourself’ module is a core introduction to leadership success and builds on the research of Ron Heifetz and Marty Linsky from the Harvard Kennedy School of Government. It is a practical leadership framework that helps individuals and organisations to adapt to changing environments by encouraging them to understand the change by eschewing a hierarchical ‘leader knows best’ approach in favour of the leader seeking a diverse range of inputs and perspectives to formulate as wide an array of potential solutions as possible to select from and so effectively respond to recurring problems.

The second module explores future challenges through scenario planning, and is led by Prof Rafael Ramirez, a former head of scenarios at Shell, and an acknowledged global thought-leader on this topic, and by Angela Wilkinson, a Director at the World Energy Council and also alumnus of Shell Global Scenarios.

Module three focuses on Innovation and is led by Alan South, the former Head of IDEO Europe, the leading global innovation consultancy, and includes a presentation by round-the-globe sailor Pete Goss MBE that brings the relevance of innovation to life through crisis-experience and distils the lessons for more normal circumstances.

The final module takes Shakespeare’s play The Tempest as the basis for unpacking lessons on Sustaining Change. The Tempest itself is an allegory, a narrative tale that expresses an idea or lesson, regarding managing change, and a session led by Phyllida Hancock takes the participants through an exploration of the change process by employing techniques derived from theatre practice and informed by a profound understanding of psychology and contemporary organisational culture. The interactive process brings the learning alive, and the emotional experience allows it to embed in the participant so that they can reconnect with it more quickly back in the workplace. Research has shown that we learn new behaviours better when we have an emotional connection at the time of learning, so this is an element that the Oxford team try hard to surface in all its modules; the theatre-based activity clearly creates both a tension and later elation in the participants, and they can re-find that understanding and learning that they discover in the module more easily in the future because of it. 

Lying behind the four content modules are three parallel streams of activity that help tie the whole programme together.

National Wallace Monument, Stirling, Scotland

The National Wallace Monument, Stirling, Scotland

The programme is delivered locally where Sir William Wallace, a 13th-century Scottish hero, is commemorated by the National Wallace Monument.

The Business Projects, Personal Development Plans are supported by coaches and mentoring, and the Inspirational Leadership theme.

Scottish Water are now running their third cohort through this programme; the current cohort is the largest so far with 40 participants. By the close of this programme over 100 emerging leaders will have been through the experience and so created a sizeable ‘critical mass’ of new leaders with common leadership contexts and perspectives to take the business forward.

Waves of impact

Saïd Business School has a deep commitment to purposeful leadership.

Dr Louise Watts, a Client Director who has a strong focus on the Public Value provision at the school says 'as an institution, we consciously adopted a mission to be a world-class business school community, embedded in a world-class university, tackling world-scale problems. The research, education and executive development supported by the school focuses not only on traditional business issues, but engages deeply with societal and global issues that affect citizens around the world.' As an illustration of this the ‘GOTO’ work (Global Opportunities and Threats: Oxford, an action-oriented problem-solving community geared towards addressing some of the most complex issues that the world faces today) undertaken by MBAs and EMBAs, focuses each year on a theme of global importance – including demographics, energy and water – to harness thinking about potential innovative solutions to intractable problems.

Watts notes that 'in executive education, much of our work with clients is in the "public value" space – working with single organisational entities, but also with sectors, networks, governments and systems – to support strategic transformation and change in areas such as education, policy execution, government leadership, and public service delivery. With a sense of shared values and purpose, Oxford Saïd has been delighted to work with Scottish Water in this important partnership where stewardship and the delivery of improved value for end-users are the indicators of success and sustained performance.'

The impact of the Future Leaders programme at Scottish Water can be assessed in various ways. For Paul Campbell and Julia Stevenson, the increased level of confidence participants show in their leadership styles after the programme was a testament to its success; and the stories that emerged from that success has helped the programme propagate and flourish. A harder metric is perhaps that of the 21 participants in the first cohort (of which 16 were female) the majority have progressed on to leadership roles – the programme’s core objective. For Watts at Oxford Saïd, when dealing with public sector organisations the objective is not on relentless revenue growth and market share but on greater efficiency and operational savings and customer satisfaction (not that these are ignored in the commercial sector either). To do this requires the academic provider to fully understand the client’s systems and complexity and so enable their solutions to produce the best possible outcomes. At Scottish Water, the ‘stewardship’ approach of the organisation’s leaders was clear from the outset and has been built upon throughout the programme’s duration, so that tomorrow’s leaders continue to carry the torch to be Trusted to serve Scotland.