Monthly Archives: April 2013

We do 5, 10 and 20 year plans for infrastructure.  But how long do we expect to this infrastructure to last?  For example, how many roads only last 10 or 20 years?  Most roads only seem to grow with time.  Ancient Roman roads are the basis for many current roads.  We keep adding roads – few are ever abandoned. They simply do not go away.   So a 5, 10 or 20 year planning period makes little sense.

Roads are not the only limit.  The WPA-era water mains are approaching 80 years old, and still providing good service, and our Clean Water Act-era sewer improvements are approaching 40.  Sewer lines are similarly situated.  Many water plants are over 70; we celebrate 100 years on many.  Again, planning for only 20 years makes little sense in the context of the larger length of time.

More interesting, we rarely borrow money to pay for these projects for less than 20, 30 or 40 years.  So our infrastructure outlives our plans and our borrowing.  Often permits are less that the borrowing for infrastructure, which can cause stranded capacity in plants that may never be used.  Miami-Dade County has such a situation – they are not alone.

Let’s look at this in the context of groundwater withdrawals.  There are areas across the US where groundwater levels have fallen. They have fallen because of human activity to pump them for crops and water use.  Colorado has a 100 year management plan in the Denver basin which is basically make the water last 100 years.  Then what?  Texas has shorter plans.  The eastern Carolina drained parts of the Black Creek already, so this is not a theoretical western state issue only.  How do we address this?

Or let’s go back to Miami-Dade County the outer banks of North Carolina, historical downtown Charleston, SC, and many other venues where sea level rise could impact water, sewer, storm water and roadway infrastructure. As we redevelop those area, should plans look at the true life of those assets (100 years) vs. the 20 year plan?

Both issues involve the sustainability of infrastructure systems, which means the ability to adapt them to changing future conditions.  We have known for 10-15 years that stationarity is no longer accepted for future projections.  But we need leadership to move the infrastructure planning to the future changing conditions.


One.  That’s the mantra.  I started blogging a year ago with the statement that “It’s all one water.”  And that is true, regardless of the form it may be in (raw, waste, storm, reclaimed, gray, industrial, etc).  But I may have used too many words.  Dan  Pink notes in his newest book “To Sell is Human” that one of the recent trends is to try to get  your  message to one word.  Obama did this with “Change” in 2008 and “Forward” in 2012.  Others have noted that branding to one word is in vogue with private companies as well.  So what about the water industry? So what about water?  Maybe we simply need to say “One.”  It is all one.  We can treat any water quality to meet whatever your need may be.  So why differentiate the water source? There are many water associations out there for a variety of reasons including unhappiness with another associated (so they creates a breakaway group).  But how does this help the water industry?   There are too many water associations that are way too specialized in what they do.  Differentiating them create silos, silos that make you think water is different.  But we know it is not.  It’s all one.  So for example, the America Water Works Association is the oldest of the water industry associations and is the only one that sets standards for the industry.  It has long created manuals of practice that have been updated numerous times by industry professionals.  And water purveyors must treat all types of water to deliver healthy, safe water to your household, and they do, and have for over 100 years.  Tap water is as safe or safer than any other option.  So what would happen if AWWA were to reassert its leadership role with a new mantra that pulls the industry together.  What if they tried “One”?

In our prior blogs we talked about leaders and who they were.  I got a couple comments about those on the list, and those perhaps not.  So perhaps a little more digging is needed to illustrate the points.  For the purposes of this commentary, let’s focus on the social leaders, often political in nature.   Again, let’s do this based on quick perceptions, as opposed to deeper digging, because perception shapes our reality.  I was asked about George Washington.  In many respects Washington was our first “leader” in the Presidency, but his actions there were mostly non-descript.  He is mostly remembered as a good wartime general.  Even then,  there was really nothing to indicate he was or would be a great leader in government except that everyone respected him because of his accomplishments.  Keep in mind leaders are measured by their followers, so given the amount of respect for his accomplishment she commanded, Washington had many followers.  But perhaps his greatest demonstration of leadership was his refusal to become our king.  He noted that he had led an effort to avoid a monarchy and thought it disrespectful to those that had fallen to recreate one.  He led the revolution for change, but a permanent change.  He was supportive of the crazy radical liberal thinkers who actually had the audacity to think that a democracy by the people could really work.  We have no appreciation of just how crazy this idea was in 1776 because we have lived it as the norm for over 200 years.  But in 1776, it was anything but the norm, and the leadership in creating that democracy should rightfully be laced on James Madison, Thomas Jefferson and James Monroe, all of whom played major parts in developing the Federalist papers, Constitution and Declaration of Independence.  All had a vision of what the US could be and were able to bring others along to implement it.  Each was perhaps more of a leader as President than Washington.

But our first great leader was Lincoln, who was not always that popular as President.  Again there was nothing particularly distinguishing about Lincoln that would lead one to think he would be a great leader, but the struggles Lincoln had faced throughout his life had prepared him for the darkest hours of the young USA.  He inherited a situation where half the country had an economy based on slave labor, did not recognize slaves as people but as property, were determined to maintain their way of life and were willing to risk armed conflict to preserve it regardless of the impact on the young union.  Prior presidents and Congresses had refused to alter the status quo to keep the peace, which really festered the issue for many years and hardened positions further.  When the CSA attacked Fort Sumter and Lincoln acted.  Lincoln set a course to protect the union at all costs.  He refused to recognize the CSA as a legitimate nation (which would later make their re-entry to the union easier), instituted marshal law by executive declaration and set about to rework (change) the federal bureaucracy to support the wartime effort.  He recognized that money would be an issue, so he set a competitor, Salmon P. Chase, to create the central banking system, a major change in how a government did business.  Marshal law restricted activity that might be detrimental to the union, a radical departure from the past.  He bided his time before the change to emancipate former slaves by executive proclamation, and allowing them to fight as full members of the army. He updated the military, and despite setbacks with generals, kept changing them until they provided the results he wanted.  He pursued new developments in weaponry, yet made sure he engaged the servicemen with frequent visits to the battlefield and hospitals.  He created a vision, and became the living personification of it.  The citizens of the north bought into his vision and mission and sacrificed significantly.  In the end he preserved the union, and offered the rebels readmission with relatively limited penalty.  He was unfortunately assassinated prior to seeing his full vision.  The ugliness of civil rights that lasted another 100 years likely would not have made Lincoln happy.

Our next leader also inherited a difficult situation – FDR.  The nation was at the depths of the Great Depression caused by banking speculation in real estate, economic collapse in Europe and other factors, creating rampant unemployment, and devolved financial system.  A few starts and stops aside, FDR convinced Congress to borrow and spend money for construction WPA projects that updated or initiated water, sewer, parks, storm water and roadway projects that updated much of the south and rural areas.  He created regulations for banking and securities, including separated banking and investment monies that protected us (until many were repealed in 2000), insured personal banking accounts through the creation of FDIC, created oversight agencies like the SEC, and initiated social security in response to the banking crisis that left many older Americans in poverty, which was the start of the societal social net.  In the second half of his terms, he led a frightened nation to victory in WWII, setting up the greatest economic boom on US history.  He also died before his vision was fully realized, but his successor, led us through to plan to avoid the errors in dealing with the defeated after WWI, developing the Marshal Plan to rebuild the defeated German and Japanese economies and creating a better model for international communication (United Nations).  Both built on changes from past thinking about how to deal with the issues.

The next social leader was never elected:  Martin Luther King led us to the completion of Lincoln’s dream to integrate all Americans into one nation.  He gained champions in Presidents Kennedy and Johnson, who pushed forward civil rights legislation along with major changes in policy in the form of Medicare and Medicaid. Even Johnson acknowledged that signing the Civil Rights legislation would create a backlash among certain Americans who would abandon his party. But he made the hard choice to change.

Arguments could be made for Teddy Roosevelt, who led us to setting aside parks, and Woodrow Wilson in WWI.  It is not a coincidence that President Obama was pursued “Change” as a mantra, although he has yet to be able to institute consensus for a lot of change.  For most of the rest of our political leaders, what leadership did they display?  Harding?  Buchanon?  Grant?  Andrew Johnson?  Taft?  Hoover?  Tyler?  So many others.  Leadership is indeed difficult to come by, but leadership is defined by dealing with an opportunity, and the leaders are agents of change to resolve that issue, not the status quo.  Too many of our political leaders have desperately attempted to maintain the status quo.  As I have mentioned in classes I have taught to elected officials – no one remembers, and no one builds statues to the guy who refused to raise taxes.  We remember and build statues to those who implement change, not those that maintain the status quo.  And while all changes may not be positive, trying to return to the 1890s, is not leadership.

My thoughts are with those in Boston.  A terrible incident surrounding a wonderful springtime celebration where some one or some group that has decided that violence is somehow an appropriate means to make a point, a point that so far has escaped us in Boston.  No one deserves to be impacted by events like that.

All such acts are terrorism, domestic or otherwise.  We need to understand that the goal of terrorism is to disrupt our day-to-day life, to scare people, make them afraid to do normal activities, to cause their withdraw from society, to bankrupt business and disrupt economies by slowing cash flow and disrupt governance.  All to make some point.  Or because they are crazy.  Crazy people do crazy things; we expect it, but are always surprised when it happens.

My message to those who did this – so you are crazy, have some issue with someone, are unhappy or want change.  There are doctors and appropriate channels for change, so why disrupt people’s lives?  What does this accomplish?  That’s the eternal question.  Such behavior cannot be tolerated and tends to make us stronger.

For the rest of us, we do society and those directly impacts an injustice to “accept” it, to tolerate it or to ignore it.  May we judiciously pursue the guilty and bring them to justice.  We all must do our part.  Special thanks to all those already helping – the blood donors, first responders, people on the scene who helped.  In the meantime, as FDR said the “only thing we have to fear is fear itself.”   Defy their goals!  Don’t give into their desire to disrupt us.  May our healing begin…

Let’s think about great leaders in business and politics in the US. Our two greatest leaders were Lincoln and FDR. Lincoln led us through challenging times, but his means to govern and organization of the federal government was a huge change from those before him. FDR led us through the challenge of the Great Depression and WW2. But government and the world was hugely different as a result of his tenure in Office (and thanks to Truman for completing it).

Other political leaders included all those crazy radical forefathers who had the audacity in 1776 to think that average people could actually govern themselves. We have no conception to day what a crazy idea that was in the 18th century as we take it for granted today. Teddy Roosevelt changed how we viewed open space. But mostly is change that people wrought that made them leaders.

In business, Ford changed how car were made in an effort to sell more at lower costs. Edison changed the world with the light bulb. Los Angeles would not exist if William Mulholland had not conceived of bringing water and power across the mountains. So is it change or challenge that creates leaders? Or both? Or something else?

In the last two blogs we discussed the three issues were associated with risk tolerance in the public sector which stifles innovation, application of business principles to public sector efforts, and the lack of vision and understanding of consequences.  In this blog we will explore the third issue – the lack of vision.  This is perhaps the hardest of the three parameters discussed.  One would think that applying private sector business principles would help with the vision process, but it does not because the terms for elected officials are comparatively short term.  In addition, our demands on the private sector are short term profits which has hurt the long-term vision of both public and private sectors.

What is a vision?  It is supposed to be a concept of where you want your organization to be in a longer-term future.  It is an agent for change and those developing the vision are outlining the change they want in the organization.  What services are to be provided, what water sources are to be used, energy self sufficiency, wastewater reuse opportunities, incorporation of storm water to sources waters, etc.? All possible ideas, but they only scratch the surface of the universe of opportunities that might exist.  The key is change, which normally requires thinking outside the proverbial box.  Change rarely comes from doing the same thing over and over.  Change requires innovation. So by its very nature, the status quo is not leadership because no change is required.  Managers who “don’t rock the boat” may be excellent managers, but they are not leaders.  Elected officials who’s mantra is not to raise rates, are not leaders either.

Your customers often are a great source for defining vision.  They will tell you what services they want.  I recall a meeting went to where I was talking about leadership to some elected officials.  The public was present in force.  I brought up the concept of developing a vision.  The public was encouraged.   They spoke out about ideas.  All very good.  Then one of the Board members informed everyone that vision statements were the job of the attorney and he would just write one up.  That did not go over nearly as well as that Board member had hoped.  He was abdicating his roles in overseeing the utility as well as any leadership role he might have hoped to have.  The public knew what they wanted, and it was clearly change, something the Board member clearly did not want.

So the question is “are we that afraid of change that we cannot tolerate leadership?” Are managers and elected officials so concerned about change that they actively suppress it despite public outcry?  I often raise the following question when talking to elected officials – how many statues have been raised for politicians who did not raise rates?  We’ll talk about that next time…

In the last blog we discussed the three issues were associated with risk tolerance in the public sector which stifles innovation, application of business principles to public sector efforts, and the lack of vision and understanding of consequences.  In this blog we will explore the second issue – application of business issue into the public sector.  The public and private sectors are different.  We need to recognize this.  For the most part, the public sector does those things that the private sector deems to be averse toward profits.  Clearly everyone needs water, but if you can’t get people to pay for it, you can’t make a business out of it.  Enter government, which has the ability to lein and condemn houses for failure to be connected.  A bit more incentive.

Or take fire service.  Fire service in New York was once a private affair.  You paid and the fire company would respond.  If your house caught fire and you had not paid, then what.  No one shows.  This was illustrated nicely in the movie “Gangs of New York” and was the catalyst for creating the NYC fire department.  And many others.  It simply is not acceptable to have some people but not all, because of the risk to everyone.  Vaccinations are the same way.  Much easier to implement by government.  And historically this is what has happened.

But we often hear the commentary about how we should be “running government like a business.” However I suggest this is an oversimplified argument that ignores true differences in the objectives of the public and private sector.   The two sectors are different and let’s look at an example.  If you were in charge of Ford Motor Company and let’s say you had only two vehicles, the F150 pickup (largest selling vehicle in the US) which has a high profit margin, or a passenger vehicle which does not have a high profit margin and does not sell nearly as well.  If you determine that your revenues are likely to decrease as a result of the economy, where do you make cuts?  There is an easy metric – cutting costs and reducing production of the passenger vehicle might actually maintain or improve your profit margin.  So that manager looks like a brilliant leader.

He (generic) now gets hired to run a City because of his success at Ford.  The City of course has a revenue shortfall, so what does he do? Much more difficult.  He has police, fire, parks and recreation, planning, etc. so where do you cut.  None of them are profit centers; they are all services, the value of which cannot easily be measured.  He could evaluate the risk of higher losses if he cuts the fire department, but that likely has other issues.  Hence there is a distinct different in the metrics between the sectors.  So he cuts all services the same amount – sharing the pain because there is no means to measure the impact of success of cutting costs. Every government employee recognizes this method to reduce the budget.  So how would that have worked at Ford?  Well, cutting back on the F150 and the passenger vehicle the same percent would likely make the overall situation worse, not better.  A Ford executive making that type of decision would be roundly criticized and likely dismissed, but that same person is viewed as a successful manager in the public sector.  Nonesense.  He’s still an idiot and deserves to be fired.  Ditto the other officials that go along with such simplistic decision-making.

The public and private sectors are different, and while there are commonalities, the inability to directly measure impacts on the public sector make private sector applications suspect in many situations.  Curtaining services that have much larger, unanticipated consequences, a risk that dissuades innovation because of the inherent risks and the risk of impacting some powerful constituency. Simplistic solutions that are commonly offered up simply mean that these “leaders” simply do not understand what their “products” are nor which ones are a priority.  And hence they abdicate their decision-making for simplistic solutions that seem “fair.”  Successful leaders in business and government will tell you lesson #1 is life is not fair. We need leadership to help us make better decisions.

One of the issues that arises in the public water utility sector is where are the leaders?  A recent online discussion of the issue identified a number of barriers to public sector leadership, which differentiates the public sector from the private sector.  The three issues were associated with risk tolerance in the public sector which stifles innovation, application of business principles to public sector efforts, and the lack of vision and understanding of consequences.  Related to the latter is the understanding of the various types and perspectives of expertise within the industry.  Over the next three blogs, we will talk about each.  Comments welcome of course.

So the first one.  For the most part, public officials, city managers, finance directors and elected officials, are particularly risk averse individuals as a group.  For one thing, their tenure in any given job is relatively short (city manager are aground 2-3 years).  Elected officials spend much of their time trying to stay in office, so clearly their leadership is guided by public opinion, never a strong point for leadership. Regulatory agencies can only be criticized, so why be innovative? For all three, plus the employees working beneath these folks, their performance is in the public eye and the public is rarely forgiving of continued or significant failures.  However, innovation is often correlated with risk, which suggests that the risk associated with failure may limit the pursuit or acceptance of innovation – instead keep doing what you have been doing because that creates no waves.  Nevermind that the same old way may be inefficient or outdated, the concern is the risk if a new idea fails.  The reality is to “stick with what works,” a mantra that has existed in the industry for many yeas, does not accept innovation easily.  Particularly of issue is organizations where many mid- and often upper division managers avoid decision-making, but may be particularly poignant in pointing out decision failures of others as a means to improve their own stock – “I’ve never made a bad decision.”  But as in baseball, sitting on the bench 0 for 0, means you have never had an at bat, so you have accomplished nothing, while the person who is 6/10 may have accomplished a lot.  It is successful risk taking that may lead to changes in the organization, changes in doing business, improvements in efficiency and new means to accomplish tasks or deliver services.  You need to think “outside the box,” to use an overused euphemism.

So the question is how do we get the public and the public officials to accept risk taking, and to relax their risk averseness?  For innovation to grow, we need leadership, which means risk tolerance.  After all doing the same thing over and over, and expecting different results is the definition of insanity isn’t it?

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