Boston – you are in our thoughts

April 18, 2013
Leadership, Uncategorized
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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…

Challenge or Change – What makes leaders?

April 15, 2013
Edison, Ford Motor Company, Leadership, management, Uncategorized
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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?

Barriers to Public Sector Leaders? Part 3

April 11, 2013
communciations, finance, infrastructure, Leadership, management, planning, sustainability, Uncategorized, water sewer management
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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…

Barriers to Public Sector Leaders? Part 2

April 5, 2013
Environment, infrastructure, innovation, Leadership, management, planning, sustainability, Uncategorized, water sewer management
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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.

Barriers to Public Sector Leaders?

April 1, 2013
infrastructure, innovation, Leadership, management, Uncategorized, water sewer management
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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?

WHAT MAKES A GREAT LEADER?

March 25, 2013
communciations, infrastructure, innovation, Leadership, management, sustainability, Uncategorized, water sewer management
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WHAT MAKES A GREAT LEADER?

This a question that has puzzled researchers for some time.  Back in the 19th century we looked to enlightenment among people – mostly oriented to new ideas and processes that would move civilization forward.  That helped but did not provide full answers.  Of course we were still in the throes of the start of the industrial revolution.  We looked at psychology to show us how to find leaders at the turn of the 20th century, but that faded in favor of trying to determine traits that made good leaders in the 1920s.  The idea of traits faded as we started looking the style by which people managed (think all those tests out there), but soon found that management style, leadership perception and results were often not correlated.  In the 1990s we started looking at adaptation, but as Jim Collins points out the great companies seem to have leaders that are the opposite of the charismatic leadership many seek or seek to become.  It’s the plodders, who can adapt to changing facts or situations on the front lines, that seem to get results.  And we only tend to notice after the fact, or well into their leadership reign, not at the beginning.  In fact many of the best success stories received much criticism early on.

What this all seems to indicate is that leadership evolves, just as civilization evolves.  Those that can evolve and adapt to changing conditions appear to lead the most successful organizations, but are not often recognized as the best leaders.  No one set of characteristics in a person will fit each situation or challenge, but you need the ability to understand the context of the facts in order to chart a course and engage people in solutions.  Without buy-in, the problem will not be solved and most challenges require thought on the part of others who are committed to the same goals as the leader.  The leadership team concepts allows for the ability to delegate to those closest to the situation, or with the best skill set to resolve it, will achieve the best result and create personal accountability by creating a personal stake in the solution.

Engagement identifies another emerging hallmark of leadership which is that we all want to succeed and leaders tend to nudge their followers toward that success.  Good leaders always backstop their charges, and understand that not all situations will be resolved ideally and that there may be multiple means to resolve the problem.  That gives the followers the ability to “gamble” on innovative solutions without the fear of reprisals.  The fear of reprisals will eliminate innovation.  What you want is to lead your organization to be innovative.  Organizations that foster innovation can become more effective in their industry.  Isn’t that what we want?  Fostering innovation is how Google develops a lot of its applications.  They call it 20% time, where employees get to work on anything they want, with anyone they want, except their own projects.  Think GoogleEarth, gmail, and many others.  Dan Pink did an excellent discussion in his best seller “Drive.”  I recommend you check it out.  But then we need to ask, “When was the last time we tried something like 20% time in the utility industry?”

Should Coastal Utility Master Plans Include Sea Level Rise?

March 21, 2013
Climate, communciations, Environment, finance, funding, infiltration gallery, infrastructure, innovation, Insurance, Leadership, management, planning, riverbank filtrations, sea level rise, stormwater, sustainability, Uncategorized, water sewer management, water supplies
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Planning is a process utilized by utilities in order to reach a vision of the utility as defined by the customers or the governing board, or to meet certain demands for service projected to be required in the future.  Understanding and managing the utility’s assets provides important information related to the ongoing future direction of the utility system.  However, the only method to develop that future direction is through the planning process.  Planning should be undertaken on a regular basis by all enterprises in an effort to anticipate in to anticipate needs, clarify organizational goals, provide direction for the organization to pursue and to communicate each of these to the public.  With water and wastewater utility systems, it is imperative to have ongoing planning activities, as many necessary improvements and programs take months or years to implement and/or complete.  Without a short and long-term plan to accomplish future needs, the utility will suffer errors in direction, build unnecessary or inadequate infrastructure and pursue programs that later are found to provide the wrong information, level of service or type of treatment.

Planning can provide for a number of long-term benefits – improvements in ISO ratings to lower fire insurance rates, renewal of improvements as monies become available, rate stability and most importantly – a “vision” for the utility.  In creating any plan for a utility system, efforts to understand the operating environment in which the utility operates must be undertaken.  Second, the needs of the utility must be defined – generally from growth projections and analyses of current infrastructure condition from repair records or specific investigations.  By funneling this information into the planning process, the result of the effort should be a set of clear goals and objectives needs to be defined (Figure 8.1).  However, the types of goals and objectives may vary depending on the type of plan developed.  There are 4 types of plans that may result from the planning process.

  • Strategic Plans – action oriented for management level decision-making and direction
  • Integrated Resource Plans – Actions for utility management to tie all parts of the system together
  • Facilities Plans – for SRF loans support
  • Master Plans – to support capital improvement programs

Any utility planning effort should start with a description (and understanding) of the local environment (built and otherwise).  An understanding of the environment from which water is drawn or to be discharged is important.  Both water quality and available quantity, whether surface or ground water, are profoundly affected by demand.  A reduced demand for surface water helps prevent degradation of the quality of the resource in times of low precipitation.  Reduction in the pumping of ground water improves the aquifer’s ability to withstand salt water infiltration, potential surface contamination, upconing of poorer quality water, contamination by septic tank leachate, underground storage tank leakage, and leaching hazardous wastes and other pollutants from the surface.  Over-pumping ground water leads denuding the aquifer or to contamination of large sections of the aquifer.  Planning for is necessary for surface water systems.  Therefore, source water protection must be a part of any water planning efforts, including the appropriate application sites and treatment needs for reuse and residuals.

So let’s toss sea level rise into the mix.  What happens when sea level rise inundates coastal areas with saltwater and increase freshwater heads inland?  How do we fix that problem and should be plan for it.  Clearly master planning should include this threat (as applicable), just as any regulatory issue, water limitation, disposal limit or change in business practices should be considered.  One means to reduce the impact of sea level induced groundwater levels is infiltration galleries that may operate 24/7.  These systems are commonly used to dispose of storm water (french drains or exfiltration trenches) but what happens if the flow is reversed?  Water will flow easily into the system, just as it does for riverbank filtration. The water must be disposed of, with limited options, but let’s toss a crazy idea out there – could it be your new water supply?  Just asking, but such a system would not be unprecedented worldwide, only in the coastal communities of the US.

When do we get serious about sea level rise?

March 18, 2013
Banking industry, Climate, Development loans, Environment, finance, groundwater, infrastructure, Insurance, Leadership, management, planning, sanitary sewer, sea level rise, stormwater, sustainability, Tidal flooding, Uncategorized, water sewer management, water supplies
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Based on my last blog, his inquiry came to me.  And I think I actually have an answer:  when bakers and insurance companies decide there is real exposure.  Let’s see why it will take these agencies.  There is very little chance, regardless of good faith efforts, significant expertise, or conscientious bureaucrats to stop growth and development.  The lobby is simply too strong and local officials are looking for ways to raise more revenues.  Development is the easiest way to increase your tax base.  As long as there are no limits placed on develop-ability of properties (and I don’t mean like zoning or concurrency), development will continue.  But let’s see how this plays out.  Say you are in an area that is likely to have the street inundated permanently with water as a result of sea level rise (it could be inland groundwater, not just coastal saltwater).  For a time public works infrastructure can deal with the problem, but ultimately the roadways will not be able to be cleared.  Or say you are located on the coast, and repeated storm events have damaged property.  In both cases the insurance companies will do one of three things:  Refuse to insure the property, insure the property (existing) only for replacement value (i.e. you get the value to replace) but no ability to get replacement insurance, or the premiums will be ridiculous.  We partially have this issue in Florida right now.  Citizen’s is the major insurer.  It’s an insurance pool created by the state to deal with the fact that along the coast, you cannot get commercial insurance.  So Citizens steps in.  The state has limited premiums, and while able to meet its obligations, in a catastrophic storm would be underfunded (of course in theory is should have paid out very little since 2006 since no major hurricanes have hit the state, but that’s another story). 

As the risk increases, Citizens and FEMA, the federal insurer, have a decision to make.  Rebuilding where repeated impacts are likely to happen is a poor use of resources and unlikely to continue.  Beaches and barrier islands will be altered as a result.  The need will be to move people out of these areas, so the option above that will be selected will be to pay to replace (move inland or somewhere else).  Then the banks will sit up.  The banks will see that the value of these properties will not increase.  In fact they will decline almost immediately if the insurance agencies say we pay only to relocate.  That means that if the borrowers refuse to pay, the bank may not be able to get its money out of the deal on a resale.  We have seen the impact on banks from the loss of property values as a result of bad loans.  We are unlikely to see banks engage in similar risks in the future and unlikely to see the federal insurers (Fannie Mae, Freddie Mac) or commercial re-insurers like AIG be willing to underwrite these risks.   So where insurance is restricted, borrowing will be limited and borrowing time reduced.  That will have a drastic impact on development.  The question is what local officials will do about it?

There are options to adapt to sea level rise, and both banking and insurance industries will be paying close attention in future years.  Local agencies will need a sea level rise adaptation plan, including policies restricting development, a plan to adapt to changing sea and ground water levels including pumping systems to create soil storage capacity, moving water and sewer systems, abandoning roadways, and the like, and hardening vulnerable treatment plants.  Few local agencies have these plans in place.  Many local officials along the Gulf states refuse to acknowledge the risk.  What does that say about their prospects?  Those who plan ahead will benefit.  Southeast Florid a is one of those regions that is planning, but it is slow process and we are only in the early stages.

Groundwater Accelerates Sea Level Rise

March 14, 2013
Climate, communciations, Development loans, Environment, funding, groundwater, infrastructure, Insurance, Leadership, management, planning, sea level rise, stormwater, sustainability, Tidal flooding, Uncategorized
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Regardless of the causes, southeast Florida, with a population of 5.6 million (one-third of the State’s population), is among the most vulnerable areas in the world for climate change due its coastal proximity and low elevation (OECD, 2008; Murley et al. 2008), so assessing sea level rise (SLR) scenarios is needed to accurately project vulnerable infrastructure (Heimlich and Bloetscher, 2011). We know that sea level has been rising for over 100 years in Florida (Bloetscher, 2010, 2011; IPCC, 2007). Various studies (Bindoff et al., 2007; Domingues et al., 2008; Edwards, 2007; Gregory, 2008; Vermeer and Rahmstorf, 2009; Jevrejeva, Moore and Grinsted, 2010; Heimlich, et al. 2009) indicate large uncertainty in projections of sea level rise by 2100. Gregory et al. (2012) note the last two decades, the global rate of SLR has been larger than the 20th-century time-mean, and Church et al. (2011) suggested further that the cause was increased rates of thermal expansion, glacier mass loss, and ice discharge from both ice-sheets. Gregory et al. (2012) suggested that there may also be increasing contributions to global SLR from the effects of groundwater depletion, reservoir impoundment and loss of storage capacity in surface waters due to siltation. The loss of groundwater, mainly from confined aquifers, is troubling, and currently completely unknown. The contribution of carbon dioxide, commonly occurring in deep groundwater is also unknown. To gauge the risk to property in southeast Florida, Southeast Florida Regional Climate Compact and Florida Atlantic University reviewed twelve different projections of SLR and its timing. The consensus was 3” to 7” by 2030 and 9” to 24” by 2060. From the literature review and analysis, it was concluded that approximately 3 ft. of sea level rise by 2100 would a suitable scenario and time frame to illustrate the methodology presented in this article. To allow flexibility in the analysis due to the range of increases within the different time periods, an approach that uses incremental increases of 1, 2, and 3 feet of SLR was considered for risk scenarios. An issue normally ignored in sea level rise projections is groundwater. The importance of the groundwater table in the model is that it is responsible for determining the soil storage capacity. Soil is composed of solids, water, and air (voids). Soil storage capacity depends on physical and chemical properties, water content of the soil, and depth to the water table or confining unit (Gregory et al 1999). As the rain infiltrates the soil, unsaturated pores quickly fill up, effectively raising the water table (Gregory et al 1999). For example efforts, a groundwater surface elevation map was derived based well site information available from the USGS (http://groundwaterwatch.usgs.gov) that had a minimum of 35 years of continuous data. Using GIS, an inundation model was created in GIS by subtracting the groundwater surface model from the digital elevation model with the difference in elevation being the soil storage capacity. The photo shows the evolution of these features as applied to a section of northwestern Miami-Dade County. What this indicates it that the impact of sea level rise on low-lying inland areas may be far different that the projections using the bathtub models. It also means that wellfields, sewer mains, roadways and storm water systems will be affected far more quickly than projected from bathtub models. The method used here suggested that the estimated may be off by a factor of two of three.

Market or be Outmarketed

March 10, 2013
communciations, finance, funding, Leadership, Marketing water, sustainability, Uncategorized, water supplies
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Municipal drinking water is strictly regulated by the USEPA.  We spend a lot of time testing our water, producing reports, and providing our customers with information on our results.  The results show it works, because the number of incidents of contaminated water are few, and rarely affect larger utility systems.  We are so good at providing water that the public expects their water to be safe, yet the buy bottled water?  Wait, huh?  Bottled water? Bottled water is not regulated by the USEPA and is not subject to the same requirements as potable water.  There are less than three full time people at FDA inspecting bottled water facilities, versus thousands reviewing public water supplies.  Water utilities run millions of analyses per year and must publish the results.  So why do they buy bottled water when our water is safe?

Keep in mind that in many areas of the world, the bottled water industries move in and compete for the same supplies as we currently use.  North Florida is rife with arguments over flows to springs as are other areas.  Some of the water is simply repackaged tap water.  So in addition to competing for our customers, they are competing with the sustainability of our drinking water supplies.  Then there are the hundreds of thousands of bottles that end up in landfills.  More impact on sustainability.  At the same time, bottled water is more costly that gasoline, which everyone complains about, but that does not stop the purchases?  So what’s up?

Marketing that’s what.  We don’t market water.  I noted in an earlier blog that we simply don’t market our product, which has allowed others to compete for the same dollars.  Customers complain about rate hikes, (averaging about 5% per year for the past 10 years according to the new AWWA study), yet they happily pay over $4/gallons for many of the popular bottled waters, more and more cable channels, fancy phones, etc.  Not that any of these commercial products are per se bad, but none are required for survival like water.

Interestingly when we do market, it reaps positive results.  New York and San Francisco have seen the wisdom of marketing for year.  They ship New York tap water to Florida to make Brooklyn style bagel because Florida Water doesn’t taste the same.  DC Water changed its name, and began a marketing campaign that changed public perception of the utility and has allowed it to start dealing with its infrastructure backlog.  Some of their ideas include branding the water, and having restaurants serve it in marked glasses, paid for by the utility.  Signs on drinking fountains, in schools and even sales of tap water in stores are options some utilities have started.  But the key is started.  Marketing takes dollars, to reap benefits.  Who knows, maybe tap water is the next bottled water….