[Update 2017: Since writing this article, we helped two UK Water companies with their OFWAT outcomes submissions. OFWAT have also improved their understanding of outcomes for PR19. However, this article is still relevant and we have provided some updates to it.]
If you are in the water industry and have read any of the documentation on OFWAT outcomes, this article will help you. If you are in OFWAT, you should be embarrassed by the material and examples of outcomes that you put out in 2012. It shows a woeful understanding of outcomes and their use.
Let me explain the misunderstanding that OFWAT introduced in 2012, when they first started talking about OFWAT outcomes for their price reviews.
The use of OFWAT outcomes for price determination
OFWAT’s move towards using outcomes to develop the price determination on the face of it looks a sensible approach. Concentrate on the outcomes that the water company actually influences and makes a difference to: the things that customers’ care about. So, OFWAT reward those water companies that deliver those outcomes.
What should OFWAT outcomes look like
An outcome should make it extremely clear who the beneficiaries are and what change will happen. This example comes from an example we talk about in our Outcome thinking paper: “Students in Thresher Middle school participating in music lessons will have improved music skills on their instruments”.
Do not confuse outcomes for users, with the organisation’s goals
Not only are program goals rarely described in the UK literature they are often confused with outcomes. For instance OFWAT, use this ‘Strategic priority’ of a 2012 Anglian Water as an example of an outcome, when it is clearly a goal of the organisation:
“In 25 years we will increase the resilience and reliability of our water and wastewater services.”
The subject of the sentence is clearly, “We, Anglian Water”. Resilience and reliability for whom? The beneficiaries are unstated and implicit.
Yet knowing that Strategic objectives belong to the programme and outcomes to beneficiaries, it is easy to see their mistake. As an outcome it begs the questions: Who will benefit? What outcome will they receive from this increased resilience?
This is clearly an organisational goal. It is NOT an outcome. IF the statement said that the outcome was:
“Increased resilience for all householders by guaranteeing no water interruptions to their supplies over the next 50 years”
That statement would be closer to an outcome and could be used as one of a set of OFWAT outcomes.
We have come across the same problem as in the OFWAT document, in many examples and in the practice we have encountered. This lack of a clear distinction between organisational goals and user outcomes causes all sorts of problems.
Recommendation:
Be clear about your goals as an organisation and recognise that the outcomes of beneficiaries are not the same. They are from a different perspective.
Do you want a better understanding of how outcome thinking really works?
Then have a read of our paper on the origins and principles behind outcome thinking, the input-output-outcome model, “the Logic model” and “Models of change” that lie behind outcome thinking. It also provides five simple steps you can take to improve how you design your OFWAT outcomes, and outcomes for customers, the environment, and society, in general.
I hope OFWAT have a read of this some time.
Want to learn more
Read our Outcome Model Paper
If you are interested in our Inputs, outputs, outcomes white paper, then follow this link to obtain a copy
How we can help
If you are struggling with outcomes, or the Input, output, outcome model, and want training or expert help, then simply get in touch.
We have helped organisations the NHS, Central Government, City Councils, Mod and even a few commercial organisations with their outcomes model.
To find out more, or for an informal discussion, Contact us
