The Strategic Plan is a blue print for how MHWSC will respond to future challenges and changing priorities. It reaffirms our mission and values as a public utility dedicated to high quality service and preservation of our precious resources for future generations. It also outlines the specific goals, strategies, and objectives we will pursue to meet those future challenges and establishes some key performance indicators to measure our progress.
As the 21st century dawns, the drinking water industry in the United States finds itself in a period of rapid and tumultuous change. Consider the following challenges that are creating a clear imperative for strategic planning by water systems:
Much of our basic water utility infrastructure is reaching the end of its useful life and must be rehabilitated or replaced.
Development of new water supply sources is becoming increasingly difficult, and great emphasis is being placed on protecting source waters from contamination.
Drinking water utilities are facing unprecedented and increasing competitive pressures.
Implementation of the Amendments to the Safe Drinking Water Act is producing a flurry of new or tightened regulatory standards.
Public expectations have never been higher both in terms of water quality demanded and level of customer service expected.
About 54,000 community water systems (CWSs) operate in the US. Nearly 95 percent of these systems serve populations of 10,000 or fewer. Generally, formal planning by small water systems has been limited to that associated with major capital projects or required by financial-assistance agencies, state public utilities commissions, or other regulatory agencies.
The traditional method of long-range planning generally involves development of a set of actions to accomplish a goal or set of goals over a period of years, with the assumption that the future will be relatively stable and somewhat predictable. Traditional long-range planning does not necessarily prepare an organization to successfully respond to a dynamic or changing environment.
The environment in which small water systems operate today is exceptionally dynamic. Among the many forces at work, SDWA regulatory standards are likely to first drive small systems to respond because they set a date by which systems must take action. Systems usually have three to five years from the date of promulgation of an SDWA regulation to achieve regulatory compliance.
To varying degrees, other pressures - to replace the infrastructure, develop new water sources, and respond to competitive forces - can be ignored or dealt with in a "patch and get-by" mode for a longer time. Forestalling attention to these forces, however, can diminish the quality of service and raise the cost of the ultimate solution.
Over the next several years, systems must strive to simultaneously comply with numerous regulations. Depending on specific circumstances, compliance will involve varying degrees of 1) investment in capital, 2) enhancement of operations, and 3) improvement of management practices. This regulatory mandate for action provides a perfect opportunity for systems to plan strategically for their future.
In the past, many water systems, especially small ones, have not engaged in purposeful, strategic planning. Defined as a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, strategic planning asks what the organization does, why it does it, and how it does it, with a focus on the future. Strategic planning focuses on making the right decisions now so that the organization will be successful and relevant in an uncertain future. According to Peter P Drucker, writing for the National Performance Review, strategic planning does not deal with future decisions, but rather, how to prepare today for an uncertain tomorrow.
Strategic planning is the basis for strategic management, which entails attention to the "big picture" and the willingness to adapt to changing circumstances. It involves an uncompromisingly critical and continuous assessment of the organization, is adaptive, and keeps an organization relevant - all more likely to succeed than the traditional "If it ain t broke, don t fix it" approach.
Small water systems can implement a simple, commonsense, four-step framework for strategic planning:
Step 1 - Assess system needs, external pressures, and internal capacity
What are your infrastructure and other capital needs?
What external pressures are affecting your water system?
Does your system have adequate technical, financial, and managerial capacity to meet needs, respond to external forces, and manage change?
Step 2 - Define the "service horizon"
What are the goals and values that guide your system?
What services do you want to provide?
What roles do you want to play in these service functions?
Step 3 - Identify and analyze Strategic options
What strategic options are available to your system?
How are your technological and organizational options interrelated?
What option (or combination of options) best meets the goals of your system and its service horizon?
Step 4 - Implement and evaluate the strategic plan
Strategic planning is a dynamic and ongoing process.
The strategic plan facilitates strategic thinking by the utility on a day-to-day basis.
Strategic thinking will involve continual reassessment of the strategic plan and adjustments in response to changes in circumstances and tine external environment.
Assessing Needs, External Pressures, and Capacity
The particular needs of individual water systems vary, but many face substantial infrastructure repairs and replacements. Systems in growing areas may face additional needs, such as developing supply sources to meet growing water demand.
Major external forces shaping the industry are drinking water quality regulations, competition, pressure to restructure, and source-water availability and quality. Other forces don t really operate on any predictable timeline, but regulations are a major force because they contain fixed dates by which compliance must be achieved.
Specific activities that utilities will be required to undertake to comply with SOWA regulations will vary greatly from one utility to the next. Compliance with different rules requires focus on different types of activities. Most rules involve some monitoring. Some involve optimization of existing treatment processes others involve installation of major new treatment equipment, and still others require strong management attention. The universe of systems subject to various rules is different, and generally less than 20 percent of systems subject to any rule are expected to undertake major capital investment to comply.
In addition to understanding system needs and external pressures, a critical self-assessment of the utility's internal technical, financial, and managerial capacity plays a key role in effective strategic planning. This type of analysis looks broadly across the utility to identify strengths and weaknesses in each element of capacity.
For technical capacity, key issues are source water adequacy, infrastructure adequacy, and operations and maintenance. For financial capacity, key issues are revenue sufficiency, creditworthiness and fiscal management and controls. Finally, for managerial capacity, the main issues are accountability, staffing and organization, and external linkages.
Defining the Service Horizon
Water systems need to know, and articulate, exactly what they want to do. What are their goals and priorities over time?
Looking across the system s planning horizon, what services does the utility want to offer? For a simplified framework, four basic functional areas of water service can be identified:
Treated water storage and distribution
Retail customer services
Water utilities play three distinct roles for each service function: governance (to ensure accountability), management (to ensure responsibility), and operations (to ensure performance) For planning purposes, these roles are separated because utilities are encouraged to think about different ways to fulfill them and the responsibilities they imply.
Many traditional water systems want to provide fully integrated services, including raw water supply and water treatment, and treated water distribution and retail services. Indeed, this is the traditional manner of providing service. However, it is increasingly important for planners to step back and consider how the utility should be involved in each aspect of service.
As an example, a small water system could purchase treated water from a wholesale provider and concentrate its efforts only on distribution and retail customer services. In other words, some roles are retained while others are shifted. Given the potentially significant economies of scale associated with source-water development, protection, and treatment, such arrangements can prove advantageous and efficient for all parties involved.
In another example, some small systems might find it beneficial to partner with other utilities to provide retail customer services. Responsibility for these services could be shifted to another utility or a non-utility service provider. Joint provision of these functions also can help utilities realize economies of scale and improve the service quality at a lower unit cost.
Identifying and Analyzing Options
Water systems that have a clear understanding of the services they want to provide, as well as their own internal strengths and weaknesses, are positioned to identify strategic options that will allow them to remain or become the utility they wish to be. Strategic options may have a technological dimension and/or an organizational dimension.
When identifying technological and organizational options, two general guidelines may be helpful. First, planners should think comprehensively, considering the widest possible range of alternatives Second, planners should consider potential options over a longterm time frame, realizing some options that are not feasible in the near term may be decidedly more realistic later. Indeed, planners need a long-term time frame to identify the best long-term solutions.
The goal of options analysis is to fully consider all technological and institutional options in a way that identifies the optimum solution for a particular utility. Implementing some options may require making other changes or adjustments. The analysis of options requires a degree of nonlinear thinking. The best solutions might not line up in an orderly fashion or reflect a clear sequence of steps for implementation Often the best solutions require a combination of strategies.
Certain technological options will require an organizational change. For example, a change in the configuration of a utility s organizational roles (governance, management, or operations) might open doors for the implementation of alternative technologies for fulfilling one or more of a system's basic services or basic functions.
Implementing and Evaluating the Plan
Once the "best" option or options are identified, planners need to identity the steps necessary for implementation. The successful utility will constantly reassess its strategic plan and strive for continuous improvement. The "optimum" solution must be continually reassessed to ensure its workability. Such reassessment will lead to changes and adjustments to the strategic plan in response to changes in the external environment and in the utilities internal strengths and weaknesses.
As water systems take on the challenge of strategic planning, many tools and resources are available to support their efforts. The current plan is undergoing reassessment and revision and will be published soon.