Branding Update

March 8, 2016

Transparency in Salaries and Compensation

Utility managers often grapple with being transparent about salaries and compensation. Transparency in public agencies is mandatory because they are typically monopolies and chartered with protecting the public interest. But crafting a successful approach to transparency in the area of compensation requires a clear understanding of what influences people’s thinking about utilities and public-employees.

The Relevant Issues

Customer Choice and Competition – In most cases, utility customers cannot choose another service provider, so they clearly deserve to know whether the utility is well run and the public interest is being served. This no-choice circumstance is married to the idea that utilities have “no competitors,” which for some means that they are less efficient. Whether competition actually leads to greater efficiency is debatable, but it probably doesn’t matter. The inefficient government bias is actively reinforced in politics and the media.

The Brand of Public Employees – Lack of competition and the inefficiency brand can lead to perceptions that public employees are less qualified, less motivated, or underperform those who work in the private sector. This undeniably affects opinions about compensation.

The Efficiency Enigma and Investment – Despite the need for utilities to be efficient and build a reputation for efficiency, the efficiency issue is actually a red herring when contemplating the need to invest in water resources and infrastructure. The potential to increase efficiency, even in an “inefficient” organization, may only be a 10% opportunity. The real question is whether inefficiency is used as an excuse to oppose rate increases, leading to under-investment. Since reliable water services are essential for a strong economy and quality of life, system failures or resource shortages can cost the community many times more than the entire operating budget of the utility. This means that policy makers should be less focused on efficiency and more concerned about the liabilities that arise from under-investment. The people of Flint Michigan are experiencing these liabilities today.

Appropriate Investment Begins with the Employees – In order to adequately serve the public interest, utilities must invest in a management team and employees that are highly qualified and well trained, especially in the areas of planning, technology, and finances. People may believe that a utility general manager making $250,000 per year is overpaid. However, even skeptics might think differently when they realize that the performance of the utility affects the viability of hundreds of companies which employ thousands of people.  Clearly, dollars invested in water utilities are highly leveraged dollars.

A Strategy

Be Very Transparent – Utilities should make it very easy for people to get access to information on salaries and compensation. But this transparency should be enhanced by providing a meaningful context for evaluating this compensation.

Create a Compensation Strategy Brief – An ongoing effort to build a strong brand with policy makers and the influential public certainly helps to alleviate concerns about employee compensation. More specifically, the utility can create a brief that outlines the thinking behind the utility’s compensation strategy. This brief should highlight the utility’s fundamental role in maintaining the local environment, quality of life, and economy. It should also communicate key workforce standards, the commitment to sound planning and efficient operations, and the need for compensation that will attract and retain quality employees.

Don’t Be Apologetic – Utilities need strong leaders who are committed to protecting the public interest, securing investment, and delivering high standards of service. If challenged, emphasize your workforce standards and stand behind your compensation strategy. 

Branding Update February 9, 2016 Actually Connecting with Key Audiences Previous Branding Updates have proposed that the objective of utility branding is to protect the public's interest by securing appropriate investment in resources and infrastructure. No one wants to endure the consequences of low trust and under-investment, namely reduced reliability and degraded service. The primary audiences for ensuring that appropriate investment occurs are policy makers and those in a position to influence policy decisions. We have referred to this latter group as the influential public, and also discussed the high-quality information required to attract and keep their attention. Delivering Marquee Content, Building Relationships - A great example of making it easy for the influential public to have their "finger on the pulse" of the utility is being implemented by Dublin San Ramon Services District (DSRSD), located in Dublin, California. Their DSRSD Today program delivers very brief articles, 3-4 times per month, to their Board of Directors, elected officials, and other community leaders. These stories meet specific content and formatting standards. For example, they take less than a minute to read, and headlines typically connect an action or investment with a beneficial result. In general, DSRSD Today installments focus on return-on-investment, efficiency, financial management, and important policy decisions. These topics are relevant to customers and the community, and effective in building a strong utility brand. Recent installments of DSRSD Today are posted at  http://www.dsrsd.com/open-gov/library/dsrsdtoday Increasing Transparency - By spending less than 5 minutes per month reading DSRSD Today articles, community leaders find out what they need to know about the utility's activities, decisions, and performance. Furthermore, policy makers know who is paying attention and what information they have received. These efforts significantly increase transparency, which is not only appropriate, but in itself a great way to build trust and a strong brand.

Branding Update

November 2, 2015

The “Brand” of Branding

Perceptions of branding abound.  Many believe that branding is developing a logo or slogan, and for others it’s just spin.  Add to this the ways utility managers and policy makers often categorize branding, declaring that it’s “nice but not necessary,” or even “not appropriate or beneath” public agencies. 

Reality Strikes - But the simple fact is that utilities and their staffs are being branded.  This means they are being categorized with respect to their efficiency, planning, financial management, and transparency.  Just being a public monopoly often leads to a utility being labeled as inefficient.  And these impressions undoubtedly impact the political process, policy decisions, and investment.

Protecting the Public Interest - The objective of competent utility branding is simple:  ensure that the utility secures the funding to provide reliable and high-quality services today and in the future….in other words protect the interests of their community.  And the branding tactics are substantive.  They focus on planning, standards, and communications that ensure that the utility is actually being transparent and has a strong reputation with policy makers and the influential public.

Countering the Politics of Under-Investment - The path of least resistance is politically-palatable rate setting and chronic under-investment.  It takes leadership, a strong utility brand, and a staff that knows how to make compelling arguments for investment to counter these determined political forces.

Branding Update

October 13, 2015

The General Manager's Report

In the previous Branding Update we discussed the importance of creating marquee content that can be used to help community leaders keep their “finger on the pulse” of the utility.  In order to provide a consistent flow of information, it is important for the utility to have a systematic way of generating this content.  It turns out that many utility general managers provide a monthly status report to their boards of directors or policy makers.  Arguably, this is one of most important communication pieces that the utility produces.  This is because it should communicate only the most relevant information, in other words what policy makers and community leaders need to know about the utility.  And what do they need to know?  Certainly not technical or logistical information that is difficult to read and understand.  However, they do need to be aware of the actions that demonstrate the utility’s core competencies, for example making investments that yield compelling benefits, being efficient, and making sound financial decisions.

Standards for Marquee Content – Each information item provided in the General Manager’s Report needs to be very high quality and meet specific standards, including the following:

• Is brief, requiring less than 30 seconds to read
• Is presented within the context of the applicable business value of the utility, for example providing reliable water service or protecting the environment
• Employs a headline that connects an activity or investment with a beneficial result
• Uses simple language that focuses on enhancing service, reducing risks, or saving money  

These brief and meaningful items can then be used to consistently reach out to community leaders.  It changes the game when policy makers know that influential people are receiving and reading this “marquee” content.

Branding Update
August 6, 2015

Marquee Information

More is Not Always Better - As water and wastewater utilities have enhanced their outreach efforts they have increased the amount of information available to the public.  This begins with information that helps customers get things done using the utility’s website, for example paying a bill or getting a problem solved.  But most utilities provide more than just customer service information, and the information provided is often voluminous and pretty technical.  One justification for creating and maintaining this information is the need to be transparent.  Being transparent is required, but there is no real transparency if the important information is hard to find, or once found difficult to understand.  And despite providing lots of content, which is a chore to maintain, many utilities still struggle with forging productive relationships with community leaders (those who influence policy decisions and therefore investment).

Finger on the Pulse – Given this challenge, we can ask a simple question.  Is it possible that members of the influential public need only a small amount of focused information to have their “finger on the pulse” of the utility?  Let’s answer this questions with another question.  Would it be valuable to the utility’s staff and policy makers if they knew which community leaders were receiving and reading brief information on the utility’s investments, efficiency improvements, and recent policy decisions?  The answer is yes!

Five Minutes a Month – Making this happen is straightforward.  Information provided by the utility must be brief (requiring 30 seconds or less to read), focused on the issues outlined above, and have headlines that connect an action of the utility with a beneficial result.  Add to this recent policy decisions by the utility’s governing body and you have a content strategy that helps community leaders know what they need to know.  And all that is required is that they spend five minutes a month reading weekly communication pieces.  We can certainly argue that community leaders should have their finger on the pulse of the utility.  After all, its performance sustains the local economy and quality of life.  The utility’s job is to make it easy.

The “Ask” - A senior utility manager recently recounted that he was conducting a facility tour and one of the people on the tour was a member of the state legislature.  Near the end of the tour the legislator asked what they could do to help the utility.  In retrospect the utility manager was disappointed that he did not have a quick answer.  What if the ask was simply to give the utility five minutes a month?

Future Branding Updates will address how to make creating marquee content part of normal utility operations, and ways to deliver the information to specific community members.

Branding Update

July 8, 2015

Drought Happens, But...

Getting People's Attention - When we discuss branding for utilities we need to address the issue of whether our customers are paying attention.  And in most cases they aren't, unless they are resolving a problem with their service or paying their bill.  We call these customer-service interactions "branding moments" because these impressions about the utility's service may last for years.  And in this sense they affect the utility's brand.  So when someone is paying attention, there is a clear opportunity to make a positive impression, or communicate important information.

Communicating Scarcity or Reliability? - People are paying attention during a drought.  The public is bombarded with messages to "conserve our precious resource" and encouraged (or required) to limit their indoor and outdoor water use.  Outdoor water conservation often includes allowing lawns to turn brown or changing to very different landscapes that use less water.  But with all of this communication about drought and conservation, what is the message that utilities are sending to the public about the future?  Will it be defined by water scarcity, water reliability, or is it just unclear?  And if the future is one of water reliability, what are the standards that define this reliability and drive needed investments?

Standards and Water Reliability - In previous Branding Updates we have talked about the connection between brands and standards.  The consistent product performance that attracts us to brands we value is determined by standards, standards that apply to the manufacture of our favorite golf club or govern the service we experience at our favorite restaurant.  Likewise, a water utility's commitment to water reliability should be based on standards.  So what are these standards?  Is the utility committed to ensuring that the risk of a sustained water shortage is extremely low?  Is the water supply resilient to drought, or more importantly resilient to climate change?  Will people have to bury their swimming pools?  Will communities in certain regions have to worry about their water for the foreseeable future, and the effects this has on quality of life and the economy?  Is loss of confidence in the water supply a failure in itself?

People are Paying Attention - Talking about drought and the need to conserve is not enough.  It's imperative for water utilities to communicate their commitment to future reliability, the standards that describe this reliability, and the investments needed to make this reliability come true.  The cost of failure, meaning ongoing water uncertainty, is much too high.

Branding Update
April 23, 2015

Language Matters

Clarity or Politics - It is tempting to think that what we say and how we say it are not that important given the political environment of water investment decisions.  But in reality nothing could be further from the truth.  The language we use does have an impact on outcomes.  The ability to communicate value and create compelling arguments for investment (at the local, regional, and state levels) is essential if we want to facilitate a productive dialogue, minimize politics, and ensure appropriate investment in resources and infrastructure.  Conversely, lack of clarity leaves the door open for politics or ideology-based decisions.

Motivations, Standards, and Risk Management - As we have discussed in previous Branding Updates, the language of value is motivations and standards.  Our audiences need to know why before they can understand what or how.  So when we talk about investing in water reliability, what are we talking about?  Is the “response to a drought” dominating the dialogue (which is very relevant in the California these days) or are we talking about maintaining reliability standards that are meaningful.  For example, do community leaders and decision makers know that the “risks of a sustained water shortage must be extremely low?”  And do they know that this low tolerance for water-supply risk is prudent given the uncertainty created by climate change and the severe economic impacts of a sustained water shortage.  Does water reliability depend on the weather or on the standards, risk assessment, regional planning, communications, and investments by local water utilities and regional water agencies?

Not “Dumbing It Down” – Water and wastewater professionals have tendency to think in terms of making technical issues meaningful to the average person, often referred to as “dumbing it down.”  The problem is that value issues are not technical issues, and the average person is perfectly capable of understanding clear and compelling communications.  To be blunt, as an industry we must upgrade our language.  The challenge associated with ensuring appropriate investment in resources and infrastructure is only going to increase.  And we should not be satisfied with waiting for supply shortages or service failures to open the check books.  This approach often leads to reactive decisions that don’t lead to the highest value.  Improving our language means emphasizing motivations and standards, which often includes communicating in meaningful ways about risks and risk mitigation.  Our arguments for investment must communicate the problem, the solution, financial impacts, the logic behind the timing of the investment, and the ramifications of not taking action.  In short, our language and the structure of our investment proposals must answer the most relevant questions in advance. 

Review Investment Proposals with a Critical Eye – If you don’t believe that we need to improve our language, just read recent investment proposals (in the form of communications to policy makers) produced by almost any water utility.  Are they free of technical jargon, easy to read, and compelling?  Do they categorize the important information so the reader does not have determine on their own whether somethings is a standard, a problem, a solution, a risk, or a timing concern?  Do these communications clearly address all of the questions that decision makers should be asking?  Ultimately, does the case for investment make it difficult for a policy maker to justify a “no” vote?  These communications do not need to be long, they just need to be well-structured and clear.

Most utility communications directly or indirectly support proposals for needed investment.  And most of us do not give up our money easily.  Given this, shouldn’t our language be compelling before we blame it on politics, or policy makers who don’t have the “courage” to raise rates?