December 11, 2013
Holding an Annual Efficiency Summit
Since most utilities are part of municipalities or are
public agencies, people are often suspicious that they are not very efficient.
This categorization occurs for a variety of reasons, one being that most
utilities are monopolies, so they don't have a strong competitive incentive for
increasing efficiency. Utilities do pay attention to efficiency, but it's
difficult to benchmark. And having the lowest rates does not mean you are the
most efficient. A "you're not efficient" brand is definitely a problem when it
comes time to propose higher rates.
So, utility managers need to demonstrate to policy
makers (and anyone else who is paying attention to the utility's finances) that
efficiency is a core commitment of the organization. A good way to do this is to
hold an annual efficiency summit. This meeting/workshop should focus on the
status of current efforts, brainstorming new ideas, and setting goals for the
upcoming year. This approach has several benefits. It helps to ensure that the
organization is expending sufficient effort on efficiency improvements. It
institutionalizes the process of increasing efficiency, which communicates the
organization's commitment. And it will be a breeding ground for efficiency case
studies. The summit should be billed as one of the year's most important events.
This will generate publicity, and publicity builds brands.