1. NATIONAL WATER AND SEWERAGE CORPORATION CORPORATE STRATEGY AND DECISION MAKING Presentation to MBA Participants- Uganda Management Institute 31 st July 2010 By: Prof. Dr. William T. Muhairwe. 1

2. What is Corporate Strategy Corporate Strategy refers to the approach adopted by management to guide the future of the organisation (scope and direction). 2

3. What is decision making A cognitive process resulting in the selection of a course of action. The output can be an action or an opinion of choice. 3

4. Food for thought What are the first things you would do if you were appointed CEO of a business company like, Warid Telecom, Tullow Oil, National Housing and Construction Corporation, or PS for Ministry of Water, Education, Public Service or even a clerk to Parliament, Head Master of Buddo, Director Mulago Hospital? 4

5. In theory, Any Manager would do the following: 1.Situation analysis/ SWOT analysis 2. Formulate a Vision 3. Formulate a Mission 4. Design Strategic Plans and Goals (Long-term and Short- term)  Corporate Plans (3-5 years)  Annual Financial Budgets 5. Formulate Operational Plans/Programmes (short-term and long-term) 5

6. Transformation Process. NWSC Approach to SWOT Analysis 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. 6

7. NWSC VISION & MISSION Previous Vision: To be the Pride of the Water Sector in Africa Previous Mission: To be a Customer Oriented Organization, providing Excellent Water and Sewerage Services in a cost effective manner. Current Vision: “To be One of the Leading Water Utilities in The World” Current Mission: “To Provide Efficient and Cost Effective Water and Sewerage Services, applying Innovative Managerial Solutions to the Delight of our Customers.” 7

8. NWSC Corporate Strategy Framework – Corporate Plan: Strategic framework by which the Corporation Vision, Mission, Goals and Strategies are set out. – Performance Contract: Contractual arrangement between the GoU and the NWSC that guides the strategic direction of the Corporation. – The Corporate Plan is translated into the annual budgets, Annual Division/Departmental Plans and Individual one minute goals ( i.e. implementation targets). 8

9. Strategic planning VS Decision Making The following should be noted about Strategic Planning Strategic planning is an annual process focussed on individual business units- Practically there is need to make just in time decisions depending on the situation at hand. Strategic planning is not flexible enough to address day to day issues and is delinked from strategic decision making Strategic planning is a record of judgement management already made rather than being a vehicle for identifying and debating the critical decisions that the company needs to make to produce superior performance  However, critical decisions have to be made on a continuous basis  Secondly, decision making is a process which therefore should be undertaken in a timely and systematic manner to resolve strategic issues. 9

10. Decision making process In order to address day to day critical issues such as water scarcity, water losses, system break down, a bottom-up decision making approach is adopted which takes the following steps Operational Areas=> Identify the issue/problem Top Management => Discusses and takes decision Chief Executive => Forwards decision to the Board Board of Directors=> Optional if Board sanction is required Line Ministry => Optional, If the issue has policy implications. 10

11. Addressing the need for quick decision making Operational Plans/short term tactical programmes  100 Days Programme  Service and Revenue Enhancement Programmes- SEREP  Area Performance Contracts (APCs)  Internally Delegated Area Management Contracts (IDAMCs)  Stretch-Out Programme  One Minute Management Programme  “Checkers” Programme to rationalise the M& E activity 11

12. Emphasis in all Performance Improvement Plans Priority setting Customer focus Team work  Collective participation in the development and formulation of programmes  Work outs through the “stretch out programme” in which workers were free to air out their grievances and needs Monitoring and Evaluation Systems  Checkers un announced visits: both process and output oriented Appraisal system  Strong incentive systems and equitable gain sharing plans  One minute management system  Performance Contracts for all staff  Performance based pay  Penalties 12

13. NWSC Key Achievements Performance Indicator19982010 Service Coverage48%74% Total Connections50,826246,456 New Connections per year3,31725,000 Metered Connections37,217 245,199 Staff per 1000 Connections366 Collection Efficiency60%100% NRW60%35% Proportion Metered Accounts65%99 % Annual Turnover (Billion Shs)21108 Profit (Before. Dep) (Billions Shs) 8.0 (loss)25.4 (Surplus) 13

14. Conclusion 14 Corporate Strategy is important as a planning tool However, Regular meetings are paramount to track progress in resolving the long term issues. Corporate strategy should be underlined by programmes and plans which facilitate quick decision making Strategic planning should drive decisions if it is to have impact, other than focussing on individual business units. It is important to introduce a strategic integration process focused on uncovering and addressing the business most important strategic issues.

15. Always explore Opportunities. 15

16. 16 There is always a difference one can create in terms of Shaping one’s future. You just need determination, commitment, courage and discipline. Always, remember the saying: “WE MUST EITHER FIND A WAY OR MAKE ONE” HANNIBAL

17. Thank you! 17