to win not to lose in water utility management
Warning: strained sports metaphor coming.
It’s late January, and the National Football League season soon reaches its climax with the Super Bowl. Both of last weekend’s conference championship games saw a high-octane home teams take the lead. By late in the game, the winning teams’ strategies shifted from trying to score to trying to run out the clock. That meant lots of prevent defense, a tactic familiar to any reasonably attentive American football fan.
Prevent defense is an ultra-conservative strategy, designed to use up time and avoid disastrous, long passing plays—the goal is not really to stop the opposing team, but rather to manage moderate losses. A coach who deploys a prevent defense isn’t so much trying to win as he is trying to avoid losing. That works fine when the team that’s ahead has a comfortable lead. But when the lead is tenuous, prevent defense courts disaster because it can allow a quarterback to lead a heroic comeback. Legendary NFL coach John Madden famously declared that: “All a prevent defense does is prevent you from winning.”
Naturally, all of this makes me think about water utility management.
Compliance as performance
A few years ago I took a water operator training class through Texas A&M Engineering Extension. The course covered principles of safe operations, along with the basic math, chemistry, and physics that operators need. What really stood out to me was how virtually everything about our training involved regulatory compliance. Treatment plant operations, distribution system maintenance, even safety protocols, were all framed in terms of following rules and avoiding violations.
Things don’t seem much different in utilities’ executive suites or board rooms. Although the rhetoric of excellence abounds in water management circles, real policy decisions and capital investments tend to follow regulatory requirements. Treatment plant upgrades happen when the EPA formulates a new rule. Sewer capacity expansions come when overflows become so frequent and egregious that regulators force a consent decree.
A water system’s strategic goal might be public health, environmental quality, citizen trust, and economic prosperity, but the utilities’ management tactics often boil down to regulatory compliance. The practical goal is not so much to achieve good things, but to avoid bad ones.
The main reason is money. One of the challenges of managing great water and sewer systems is that the price of a water is much more visible than quality of water. Customers—who are also voters—know for sure what they pay for it when they get the bill each month. Water systems are literally buried. Unless quality is egregiously awful, the only marker of a system’s quality is regulatory compliance. It’s hard for utilities to demonstrate their real value in terms of anything but monthly bills and disasters.
Utility leaders are thus stuck between a rate increase rock and a regulatory hard place. For many, “success” means avoiding rate increases and regulatory violations as long as possible. The folks who operate these essential systems don’t like running them to the brink of failure, but as one city utility executive told me: “It’s hard to get anything done without a regulatory boot to your backside.”
That’s a fundamentally negative way to think about performance. Is it any wonder that utility managers often run a prevent defense?
From loss avoidance to winning
There are some creative, dynamic, and courageous leaders in the water sector who have found ways to build achievement cultures in their utilities. But hoping for the serendipitous arrival of an exceptional leader isn’t really a strategy. What would it take to change the game? How can we get utility leaders to think about seeking success, rather than avoiding failure?
What’s needed is a comprehensive, independent, and visible system for monitoring and reporting water and sewer utility performance. What if there were monthly box scores for utilities? What if they received a report card and grade point average every year, with results reported publicly?
Aquam cum laude
This isn’t really a radical idea; Congress had transparency in mind when it required utilities systems to provide water quality reports, and the State of New Jersey was thinking about political accountability when it launched the Water Quality Accountability Act. Too often we forget that public information about water system performance also creates a credit-claiming opportunity. But reporting under those laws is complicated and in many ways opaque.
Anyone who has been to high school understands grades and GPAs. A simple, comprehensive report card would give a utility’s leaders a way to communicate progress. A new management team could set clear improvement targets and show how their efforts moved the system’s GPA from 2.7 to 3.5. Mayors and councilmembers could trumpet the improvements, helping to demonstrate the value of those unpleasant rate increases. Water systems that achieve and maintain consistent excellence across the board would qualify for the Dean’s List.
I’m a big believer in the power of measurement and incentives. If we keep score correctly, our utility leaders can do more than avoid disaster—they can play to win health, environmental quality, and economic prosperity for our communities.
Water Sector Reform #4: Human Capital
With a major federal investment in water infrastructure possibly on the horizon, the United States has a once-in-a-generation opportunity to leverage that money into a structural transformation of America’s water sector. This is the fourth in a series of five posts outlining broad proposals to reform the management, governance, and regulation of U.S. drinking water, sewer, and stormwater systems. The first proposed reform was consolidation of water utilities; the second was an overhaul of financial regulation; the third was investment in information technology.
My fourth proposal is to invest in water sector human capital through workforce development and streamlining labor markets.
Working for Water
The U.S. water sector’s workforce challenge has been evident for a long time; as early as 2005 observers identified a slow-rolling retirement tsunami washing over utility organizations and recognized that the supply of workers was insufficient to meet the nation’s needs. In many ways, the water sector’s workforce issues mirror those of the wider public sector workforce. But addressing water workforce challenges isn’t just about quantity, it’s about quality.
Once upon a time, water system operations was a semi-skilled job. If you had a strong back, could turn a wrench, and operate a backhoe, you could probably do it. Until recently, a water operator could get by with limited reading comprehension and little to no aptitude for math or science.
That’s no longer true. Today water and sewer system operations are highly skilled jobs. Regulations and technology are ever-advancing. Modern water systems require operators who can interpret complex regulations. Operators must have a solid working understanding of physics, chemistry, and biology, and a good command of math. And they have to be able to communicate with management and engage directly with the public.
Water systems are getting smarter; water operators have to be smarter, too.
But highly-skilled operators are in short supply and human capital isn’t evenly distributed. Training up a utility operator takes a lot of time, and in rural or remote parts of the US it can be especially hard to find an adequate supply of educated workers who can be trained to operate water systems.
Human capital & utility performance
Labor availability has measurable effects on effects on water quality. A few years ago David Switzer and I analyzed the relationship between SDWA compliance and the availability of skilled workers in a labor market. We found a strong relationship between labor force education and utility performance.
We also found that larger organizations are more effective in leveraging human capital than small ones. The reason is pretty clear: if you’re a smart, ambitious person interested in a water career, a small utility is at best a stepping stone, at worst a dead-end job. There may be only a handful of employees and the only opportunity for advancement is to wait for another operator to leave—or to leave yourself. So small systems struggle to attract and retain good employees. I heard directly from one utility manager that systems sometimes deliberately choose not to invest in training because they fear that a well-trained employee will leave. It’s a kind of strategic mediocrity.
Making matters worse, each state has different training and licensing regimes for water operators. There are separate licensing systems for water and sewer. There are separate licensing programs for treatment, distribution, and collection systems. Sometimes states set up reciprocal licensing agreements, but it’s a confusing and frustrating patchwork. All those rules are sand in the gears of the labor market and discourage smart, ambitious people from entering or building careers in the water sector.
Human capital investment
We need to grow the supply of human capital, and we need to streamline the labor market. So proposal number four is to invest in workforce development, and create national certification standards for operators.
This isn’t a particularly new idea—it’s a revival of an old one. Discussions of the 1972 Clean Water Act tend to focus on the pollution controls in Titles III and IV (for obvious reasons). But importantly, the Clean Water Act included a huge federal investment in research and training. In the 1960s environmental engineering was in its infancy as a field, and when Congress passed the Clean Water Act it wasn’t exactly sure how to make the nation’s waters fishable-and-swimmable.* So Uncle Sam built human capital for the water sector as it was building physical infrastructure. It’s telling that Title I of the Clean Water Act was an investment in people, and Title II was an investment in pipes.
Folks in the water sector sometimes refer to the generation of water professionals who emerged in the 1970s and 80s as the “Class of 72,” recognizing that in many ways the field of environmental engineering came of age due to that federal investment. We need a similar investment today to build the next generation of water professionals. We need careful, data-driven research on effective utility management, leadership, and organizations. We need rigorous degree and certificate programs to funnel talent into the water sector. America’s land grant universities (like Texas A&M!) are great institutional venues for these efforts, but there are other good models out there, too.
Freeing the market
Labor markets—like most other markets—work best when buyers and sellers can exchange freely. Along with investments in research and training, we need to harmonize, liberalize, and streamline licensing regimes for water and sewer operations. Instead of a crazy patchwork of training programs and licensing requirements, let’s establish national standards and a national accreditation system for both individuals and training institutions. Organizations like ANSI and AWWA have processes in place to craft water technology standards; the same model could be applied to licensing and certification. With national training and licensing standards in effect, a smart, ambitious person could enter the water sector with the prospect of building a career that could take her anywhere.
*Political scientists call that “speculative augmentation,” which is a polite way of saying “Congress has no idea what to do, so it’s going to kick the problem to experts and hope they can figure it out.” In the case of environmental regulation, it’s worked out reasonably well.
Public Administration Professionalism at the Flashpoint
Presidents issue orders, Congress passes laws, and courts make judgments, but immigration policy really succeeds or fails when bureaucrats interact with people seeking entry to the United States. Immigration policy is what happens when an ICE agent detains an individual (or doesn’t), separates children from parents (or doesn’t), and puts kids in cages (or doesn’t). Immigration policy is what happens when a DHS contractor attends to a wailing toddler, or leaves frightened children to their own devices in adherence to administrative guidelines. In the end, human rights are protected or violated not by politicians, but by the men and women who put regulations into action.
What drives bureaucratic behavior?
Although public attention tends to fixate on laws and rules when trying to understand public policy, decades of public administration research indicates that organizational norms and values determine what public servants do. Public employees from soldiers to teachers to police officers look to their peers for informal guidance on what is honorable, acceptable, or forbidden. Monitoring systems and the threat of disciplinary action turn out to be lousy predictors of public administrators’ actions. When bureaucrats enforce (or refuse to enforce) rules, it’s because their fellow bureaucrats sanction that behavior. Smart public agency leaders do not rely solely on orders, but rather seek to instill systems of ethics and build a sense of mission in their organizations.
Professionalization in public administration is an effort to enhance this kind of peer accountability by building loyalty to principles of public service. America’s military academies are excellent examples: they seek to build within officers not only respect for chain-of-command, but also a system of ethics that defines military professionalism. In the ideal, professions provide an “inner-check,” enforced by social approbation or disdain by fellow professionals, that guides individuals to uphold shared norms and resist unethical orders.
Administration at the border
The agencies at the flashpoint of America’s current immigration crisis give plenty of reason to worry. The main bureau charged with implementation of immigration laws is the Immigration and Customs Enforcement (ICE) agency, which was formed fifteen years ago when the US Customs Service (part of the Treasury Department) and Immigration and Naturalization Service (Justice Department) were consolidated within the new Department of Homeland Security as part of the post-9/11 reforms. Organizational culture and professionalization take time to develop, but this young agency has been charged with implementing some of the country’s most vexing and incendiary policies, even as its nascent culture is still forming. In early 2017 the Trump Administration ordered the hiring of 10,000 new ICE agents. Simply hiring and training that many people quickly is a daunting task; professionalizing and building a sense of mission in each new agent even more so. The Federal Bureau of Investigation (FBI) provides a useful contrast. ICE and FBI agents each receive 20 weeks of training upon entry into their agencies. But new FBI agents must also be accomplished college graduates, and upon appointment they enter a highly-professionalized agency with thousands of experienced agents, a storied history, and deep sense of organizational identity. It is not surprising that FBI officials have been more defiant, and ICE officials more acquiescent, in their relationships with the Trump White House.
DHS also relies heavily on private contractors to operate detention facilities, and some of the most troubling accounts of child migrant treatment emerge from these privately-operated facilities. If public administration professionalism implies loyalty to professional norms and ethics, then private contracting does just the opposite. A contractor’s livelihood depends upon satisfying a client (in this case, DHS executives), adhering to regulations, and fulfilling contracts. A contractor whose personnel refuse to treat migrant children as specified in a contract is likely to find that contract terminated.
Administrative evil and public professionalism
Governments can do great good and evil because bureaucratic agencies provide the capacity to put policy into action, as Guy Adams has observed. Administrative evil is not a consequence of inefficiency (the usual bureaucratic lament), but rather a result of a technical rationality that is the very hallmark of bureaucracy. Without professionalism, bureaucrats pass accountability for their actions to political superiors. Indeed, a naïve view of democratic accountability would demand dutiful compliance by ICE agents to orders (or tweets?) issued from above. Public service professionalism implies that a federal employee’s primary duty is to the public good, not to the whims of the person at the top of the organizational chart. Without a foundation of professional ethics and systems of accountability to professional peers, the rational administrator can find himself or herself participating in destructive acts.
So long as the United States has borders, it will need an agency to make those borders meaningful. But building a sense of professionalism and peer-accountability to ethical principles is crucial to ICE’s or any other border enforcement agency’s role in a democratic state. In 1952, political scientist Norton Long reflected on the lessons of the Second World War for American public administration:
It is a fortunate fact of our working constitution that it is complemented by a bureaucracy indoctrinated with the fundamental ideals of constitutionalism… In a real and important sense, it provides a constitutional check on both legislature and executive. It is no neutral instrument like the German bureaucracy, available to Nazi and democrat alike, pleading its orders from ‘die hohe Tiere’ as an excuse for criminal acts.
The decency of the agents charged with implementing public policy is a crucial check against government abuse. Professional public servants are the first line of defense and the last best hope for protecting human dignity in times of political turmoil.