DEVELOPING A WINNING COALITION FOR REFORM Dr. William T. Muhairwe World Bank Institute

What is a Reform? A reform is a change from the Status Quo, usually for the better Water sector reforms are not new, they have been around for decades The main objectives of most reforms in the water sector include: Increasing access to water & sanitation services Improving efficiency of operations Enhancing the reliability, sustainability & affordability of services

Why are Reforms Necessary? … Atypical Public Enterprise Problems Poor Management Lack of Clear Leadership and Vision The BOSS Attitude / Scare The BOSS / Manager is always correct – no consideration of staff views Bureaucracy Business as usual Attitude – No innovation Poor Time Keeping: Late Arrivals- Early Departures Individual Sketch Plans drive direction of work- No common plan/ sense of direction

Why are Reforms Necessary? … There is therefore need to Turn around poor performing utilities into efficient service delivery entities This requires Building a Winning Coalition of Staff and Management teams to champion the reform process. Winning Coalitions are supposed to cause a transformation in performance unlike before Different utilities have registered different experiences from their reform processes, with a number of reforms not being successful; why?

Why Reforms Fail? … The mistakes made Externally driven reforms with inadequate internal ownership One-man driven reforms – inadequate leadership & stakeholders buy-in Failure to clearly understand the problem at hand Rapidly implementing large scale reforms – wanting to build Rome in one day Huge budget reforms – focusing on huge investments & missing the low cost quick-wins Inadequate managerial & technical capacity to drive the reforms etc……

What are the Implications ? Financial crises for businesses – bankruptcy & deficits Poor service delivery - rampant customer outcry Management condemnation from the political and other oversight authorities The sinking ship – restructuring and loss of jobs Invitations/imposition of managerial ideologies, including those that are incompatible Again, the list is endless ----------------

What next?? What are the first things you would do if you were appointed MD of a water utility in Cairo or Tunis to develop a winning coalition for Reform?

What Next?? Performance Contract with GoU Corporate Plans (3-5 years) In Theory, Any Manager would do the following 1. SWOT analysis 2. Formulate a Vision 3. Formulate a Mission 4. Design Strategic Plans and Goals (Long-term and Short-term) Performance Contract with GoU Corporate Plans (3-5 years) Annual Financial Budgets 5. Formulate Operational Plans/Programmes (short-term and long-term) 6. Select a vibrant and committed Team of Staff to Champion the Reform process

NWSC Case: SWOT Analysis as a first step of the Transformation Process NWSC SWOT Analysis as at 1998 Strengths: Sound infrastructure, abundant plant production capacity enabling legislative framework, well trained workforce, sound billing system, good corporate planning strategy, good financial budget planning policy. Weaknesses: Low staff productivity (36 staff/1000 connections),high UfW (60%), Low Collection Efficiency - 71%, huge arrears of about 14 months of billing, high number of unviable towns. Opportunities: Government support, relatively stable economy, donor support, abundant water resources, Threats: Huge Debt and pending debt Servicing obligations, VAT law.

NWSC Case: Visions & Mission Previous Visions of NWSC 1. To be the Pride of the Water Sector in Uganda (before 1998) 2. To be the Pride of the Water Sector in Africa (1998-2004) Current Vision Statement 3. To be One of the Leading Water Utilities in the World Mission Statement To provide Efficient and Cost effective Water and Sewerage Services, applying Innovative Managerial Solutions to the Delight of our Customers

NWSC Case: Strategic & Operational Plans Formulated both Long Term and Short Term Plans Policy level Strategic level, change in Board & Management First Corporate Plan 1997- 2000 Annual Budgets Operational level Operational framework through Change Management Programmes (100 Days, Service and Revenue enhancement project (SEREP), Area Performance Contracts (APC), Stretch out programme Internally Delegated Area Management Contracts (IDAMCS), One Minute Management Concept (OMM), Checkers system

NWSC Case: Team Building Formulated Task Force Committees to champion the turnaround Developed a sequenced, prioritized list of reforms for the Identified 5 critical areas of the business Empowered committees to develop programmes suitable for the turnaround Adopted a Participatory approach involving all Area Managers, Trade Union officials in proposing solutions to prevailing challenges Collective participation in the development and formulation of the programmes. Work outs through the “stretch out programme” in which workers were free to air out any of their grievances and needs.

NWSC Case: Other Coalition Ingredients Good Planning and continuously challenging Management teams with new performance targets Information sharing through benchmarking Systematic use of external contracts Vs short-term internal performance programmes/contracts Stakeholder engagement of; Donors The Government The Public & the Media Strong Monitoring and Evaluation

NWSC Case: Key Lessons =>Appraisal system =>Autonomy Devolution of power from centre to areas Institution of Performance Contracts (APCs and IDAMCs) =>Customer Focus =>Team Work Collective participation in the development and formulation of the programmes. Work outs through the “stretch out programme” in which workers were free to air out any of their grievances and needs. =>Monitoring and Evaluation Systems Checkers un announced visits: both process ad outputs oriented =>Appraisal system Strong incentive systems and equitable gain sharing plans One Minute management system Performance Contracts for all staff Performance based pay Penalties

Key Lessons: How do you Create a Winning Coalition? Ref Book: “How to be Brilliant; Change your ways in 90 days”-Michael Happell Positive Action Break out of Limiting Beliefs Think Differently Ability to Manage Stress Massive Action

Key Lessons: How do you Create a Winning Coalition (Positive Action) “Attitudes that Attract Success”- Wayne Cordeiro Attract Success Make your choice Believe you can change Train your eyes to see what is good Practice, Practice & Practice Never Give Up

NWSC Key Achievements Performance Indicator 1998 2011 Service Coverage 48% 75% Total Connections 50,826 272,406 New Connections per year 3,317 25,600 Metered Connections 37,217 271,734 Staff per 1000 Connections 36 6 Collection Efficiency 60% 98% NRW 32.8% Proportion Metered Accounts 65% 99 % Annual Turnover (Billion UShs) 21 131.3 Profit (Before. Dep) (Billions Shs) 8.0 (loss) 30.4 (Surplus)

Title: Making Public Enterprises Work 18 Title: Making Public Enterprises Work From Despair to Promise: A Turn Around Account Author: William T Muhairwe Co-Published by: IWA Publishing & Fountain Publishers

Subject of MPEW Public enterprises remain the dominant medium of service provision both in developing and developed countries, MPEW; contains unique home-grown turnaround reform steps that can help to revamp under-performing enterprises. - It provides a response to roadblocks that slow reforms in most public enterprises demonstrates that performance contracts combined with incentives can work wonders in public enterprises. provides experience & lessons on how enterprises can work without industrial unrest in very difficult conditions. demonstrates how public enterprises that have been listed for privatisation can provide alternative restructuring steps. has tested lessons that any enterprise can benchmark to address its service delivery challenges.

What does MPEW contain? MPEW is arranged in Five Parts and is combined with facts, simplicity and fun, to presents a unique account of methods used for constructive engagement and dialogue with donors, government officials, workers, suppliers and, indeed, the public/customers. All chapters are interspersed with tested lessons that any enterprise can benchmark to address its service delivery challenges. Part One - Tough Job: Could it be Done? – explains how NWSC with a social mission objective was conceived and set-up. And how various teams tried their best to keep afloat, under very difficult conditions

What does MPEW contain?... Part Two – Down to Work: The Turnaround – discusses how the Author together with his Managers, mooted many ideas to turn the Corporation´s fortunes around. This part highlights the importance of team building and teamwork and underscores the importance of involving members of staff, from top to bottom Part Three – So far so Good – provides a snapshot overview of the net effects of the various strategies implemented and how they contributed to the overall improved performance of the Corporation. Part Four – Not Alone: Partners' role – recognises the important role played by the various development partners, civil servants, politicians, and business community to move the Corporation to the Top Part Five – Yes We Did – answers the question posed in Part One and demonstrates that ideas which lead to development are not cast in stone

The targeted readership... Managing Directors/CEOs and top managers of Performance oriented companies/service organisations Government officials Development partners Reformists of non-performing enterprises Academicians – Students, Senior lecturers/professors in departments of engineering, business administration, economics and management, finance and administration, and researchers

In Conclusion For any reforms to be successful in a utility, there must be a winning coalition of staff and other stakeholders, headed by a Charismatic Leader to champion the reform process.