Managing Water Supply Systems Using Lateral Thinking Techniques: Practical Applications in East Africa

In most cases, reforms were triggered by bizarre performance. In Dar es Salaam (Tanzania), according to Kaaya (2007), as of 2005, the operating company Dar es Salaam Water and Sewerage Corporation was plagued by overstaffing at a level of 1,350 staff members; lack of teamwork; mistrust; uncontrolled customer bill adjustments and collusion between staff and customers; and water leaks that resulted in non-revenue water output of over 50 percent. In addition, the revenues were very low (about US$1 million) with an attendant low collection ratio of about 40 percent. The billing system was confused and water reliability in most parts of the city was about $2–8\text{hours}$ per day. On the other hand, according to Mugisha (2008), prior to 1998, the National Water and Sewerage Corporation of Uganda (NWSC-Uganda), with support from donor partners, carried out heavy investments in infrastructure with the main objective of rehabilitating their existing system. Unfortunately these investments were not matched with efficient commercial and financial management systems that were necessary to ensure the delivery of sustainable services in the mid- to long term. The corporation continued facing numerous challenges that compromised its ability to effectively deliver efficient services to its customers. Most of the problems were a result of low operational efficiencies. There were only 50,000 customer connections and only 48 percent of the population (1.2 million people) had access to the piped water supply. Plant capacity utilization was only 55 percent; 60 percent of what was produced was lost as unaccounted for water. With this level of performance, the corporation could barely sustain the daily operation of the system. There were rampant water leakages and a poor response rate to the few leakages that were reported. The uncontrollable and widespread vandalism of meters and other components of the water system not only increased the level of water losses but also increased the cost of delivering services. Most of the existing customer and bulk meters were defective and registered inaccurate readings as a result of the poor maintenance culture and lack of a clear meter replacement policy. A large percentage of the customers were consuming water illegally and there was neither a clear mechanism for tracking the culprits, nor measures to curb such practices. The distribution network did not have delineated hydraulic zones, which made it difficult to balance the network and ensure effective management of water losses in the system. Because of the high losses in the system and poor operational practices, most of the towns experienced intermittent services ranging from $15\text{to}21\text{hours}$ . In Nairobi City (Kenya), water operations were under direct management of the city council and revenues were mixed up with other city revenues. As such, water revenues were often diverted, leaving no funds for water infrastructure investments. There was overstaffing and a low productivity level—a typical civil service orientation characterized by laziness and patronage. Service reliability was less than $10\text{hours}$ in most parts of the city. There was collusion between staff and customers, and revenues were being collected at the source.

Brown (2007) admits that utility reforms have not been easy. He enumerates reform cases in the capital cities of East African countries, pointing out that reform programmes should be realistic, inclusive, daring, and creative. According to Brown (2007), the Nairobi City water system is currently operated by Nairobi Water and Sewerage Company Ltd, which has implemented a number of incremental reforms in the last three years. The first step was to create an autonomous public limited company, governed by public law, where assets remain in public hands. The second step was mobilizing efficiency gains through decentralizing operation business centers; outsourcing services and operations to private companies; and delegating non-core functions (security services, maintenance and cleaning services, connections, etc.). In this step, a number of incentive plans have been put in place to strengthen organizational behavior and productivity. The third step relates to mobilizing investments (market). In this regard, the possibilities include potential for strategic partner(s)/joint ventures and local capital market, and listing on the National Securities Exchange.

In Dar es Salaam, according to Kaaya (2007), the period 1998-2002 was characterized by rigorous transactions aimed at acquiring a private operator. Specifically, in 2002 the assets were separated from operations management through the creation of an asset holding authority, Dar es Salaam Water and Sewerage Authority (DAWASA). In 2003, the operations management was subcontracted to a joint stock private company, City Water Services Ltd. In 2005, the contract with City Water Services Ltd. was terminated and replaced with a public company, Dar es Salaam Water and Sewerage Company (DAWASCO). Both DAWASA and DAWASCO are regulated by the Energy and Water Utilities Regulatory Authority. According to Kaaya (2007), since 2005 DAWASCO has implemented a series of performance recovery programs. These include the first three-month initiative, named “operation rescue plan” (July–September 2005). This was followed by a one-year annual plan called the “win-win” program (October 2005–June 2006). A successor annual plan named “the turning point” program then followed (July 2006–June 2007). The recent annual plan is named “take-off” and is meant to make quality service visible on a sustainable basis. In Kampala City (Uganda), Mugisha and Berg (2008) outline a number of performance improvement initiatives that have been implemented. During the period 1998–2001, services were operated by the Kampala Revenue Improvement Project Management Contract (KRIP). During the period 2001–04 there was significant outsourcing of non-core activities (e.g., guard services, grass cutting, and landscaping). At the same time the KRIP contract was terminated, operations were transferred to Kampala Water Supply and Sewerage Area Management Contract: Ondeo Services. From 2004 to 2008, the operational activities have been managed under Internal Delegated Area Management Contracts using area management teams. According to Brown (2007) the service quality is visible.

Based on case studies of utility reforms in East African cities, Brown (2007) suggests that private sector participation (PSP) can lay the foundation (e.g., two rounds of PSPs in Uganda and failed PSP in Tanzania have provided strong recipes for subsequent commercialization initiatives). In addition, there are mixed results from PSP engagements so far but the practice is not dead. Indeed, PSP is still one of the permanent barriers to “bad” public policies that have brought African utilities where they are now. Moreover, PSP does not also imply international PSP; however, new models are needed and are emerging to fit the African utility market. Overall, the use of PSP mentalities has resulted in significant performance gains in all the three East African cities. For example, in Nairobi City, revenue collections have increased from about 100 million Kenyan shillings to more than 250 million in $\text{three}\text{years}$ of reforms. On the operational side, non-revenue water has been reduced from over 50 percent to less than 40 percent. Similarly, in Dar es Salaam, revenue collections have increased from about 950 million Tanzanian shillings in 2005 to more than 1,700 million in 2008, while non-revenue water has decreased slightly from about 45 percent in 2005 to 42 percent in 2008. During the same period, in Kampala City operations, collections have increased from 2,500 million Ugandan shillings in 2005 to 5,000 million in 2008. Non-revenue water has declined from about 43 percent in 2005 to 38 percent in 2008.

I pointed out the need for creativity to achieve effective utility reforms. In this paper I pin-point the distribution and sales part of the water supply chain and explore different ways of incorporating operational creativity to support reforms. I chose the distribution and water sales part of the chain because of its complex nature, which poses the greatest challenges to utility managers. Most utilities choose this portion of the water supply chain to outsource due to the complex managerial challenges involved. We have chosen the managerial dimension of creativity since it is the entry point for managerial innovation that has become the center of most utility reforms in developing countries. I test one of the concepts of creativity, a technique called “lateral thinking” and how it can be incorporated into utility operations to enhance performance. The discussion enhances our understanding of creativity in water utility operations management and how it can be used to support utility reforms.

In tackling difficult operational issues requiring new directions in thinking, it is often necessary to break out of our normal thinking patterns, that is, to break away from the safe cocoon that we have built for ourselves (Tanner 1997). In this paper I explore a broad application of creative problem solving. I look at three steps: problem definition (focus area); idea generation (creative thinking); and action planning (implementation). When applying creativity to utility operations it might be a good idea to consider these words from Schwartz (1997, p. 122): “. . . belief releases creative powers. Disbelief puts the brakes on. Believe, and you will start thinking constructively.” In most cases operational problems might seem that they do not have solutions, especially for managers that are averse to change. According to Tanner (1997), creativity techniques can be categorized in many ways. These include pattern-breaking tools; idea-collection processes; and focused thinking frameworks. In this paper, I explore the application of one of the pattern-breaking tools proposed by Dr. Edward de Bono called “lateral thinking” (de Bono 1990). Lateral thinking, according to the Oxford English Dictionary is defined as “seeking ways to solve problems by apparently illogical means.” According to Tanner (1997), the lateral thinking process follows three steps: (1) selection of a focus area requiring creative new ideas; (2) development of provocations relating to the focus area using lateral thinking techniques; and (3) generation of sensible ideas dealing with the problem, stimulated by the provocations. Therefore, in this paper I discuss cases in water distribution and sales operations that have been tackled through lateral thinking: focus area identification, identifying suitable provocation, and generating implementable idea.

From the case studies and other elements in this paper, I make a number of conclusions. Schwartz (1997, p. 282) suggests that “the difference between success and failure is found in one’s attitudes toward setbacks, handicaps, discouragements, and other disappointing situations.” In this paper I have demonstrated that through creativity, teams can come up with seemingly illogical ideas geared towards significant inroads into operational performance enhancement. Specifically, the highlighted case studies suggest that there is always need for key lead champions to fabricate provocative thoughts that impel teams towards implementable initiatives. According to Steers et al. (1996, p. 513), “incentives, a version of what psychologists call extrinsic motivators, do not alter the attitudes that underlie our behaviors. They do not create an enduring commitment to any value or action. Rather, incentives merely—and temporarily—change what we do.” In this respect, some of the case studies suggest that incentives should be tagged to an emerging business strategy and should be short-lived, addressing a certain focus performance area. In tandem, some case examples incorporate a risk mechanism that guarantees a win-win situation between the operator and the supervisor (client representative). In short, most of the case studies suggest that managerial reforms must be creative, ambitious, and daring; they must explore new ways of doing things. I also find that creativity requires proactive benchmarking to cross-fertilize managerial thought with best practices and building desire for peer excellence. The discussions also suggest that effective water operations management requires inculcating meaningful rivalry among operating teams. Further, I have also seen that there is need for an organic model of organizational structuring to cope with the uncertain and complex nature of water distribution operations in African water utilities. Likewise, operational plans in such environments should focus on achievement of targets and performance trends through flexible implementation of practical strategies.