Since we got underway at CSA, here are just a couple of highlights, first up a speech in lima, peru and then ausrail 2019 infrastructure funding panel.
We delivered a keynote opening address to a conference in lima, peru titled ‘Reinventing the Infrastructure X Factor’ A Global perspective on Trust, Service and Customer Stewardship
Here is an Edited version of Keynote Address delivered by Garry Bowditch to the 5th International Infrastructure and Development Congress November 2019, Lima Peru.
You may be wondering why there is an Australian standing before you in Lima, Peru talking about a television talent show called the X Factor?
Let me explain.
The chemistry of the show is to give broad cross section of society an opportunity to show their talents – as a result some fail spectacularly, others scrap through with barely credible performance and a select few produce the X factor.
What particularly impressed me about many contestants, was that they were not deterred by the cynicism and scepticism expressed by the judges and the audience – they stayed true to their self-belief without being arrogant or presumptuous.
Companies we admire
The X Factor talent show provides some compelling lessons on what it takes to gain acceptance and indeed adoration with the people.
I think it is fair to say, that there is no substitute for being genuine and authentic, in order to win hearts and minds of the people.
This is true of the TV show, and it is true for the provision of infrastructure; and these lessons also apply to organisations.
In fact, the companies we tend to admire show the same characteristics as the people we like.
That means for example your organisation (and projects you undertake) should seek to be collaborative, ambitious, resilient and humble.
To gain acceptance with the people a good starting point is for your project to make strong practical sense, have no hidden agendas and delivered competently so benefits for customers and community can be understood and are authentic enough to be believed-in.
X Factor in Infrastructure
A formal definition of the X Factor is the variable in a given situation that could have the most significant impact on the outcome.
In this presentation I am hopeful that we all share at least one thing in common. That is, we have a burning ambition for our infrastructure projects to have a huge positive long-term impact on the lives of our people, and to propel our respective nations forward.
In other words, we seek the infrastructure X factor – that is the outcomes and benefits that flow from an investment. For example,
- safer communities at night because of good street lighting,
- better roads, public transport to get to and from work quickly, efficiently so you are more productive at work and have more quality time with your family,
- great hospitals to heal the sick and schools so our children have better opportunities than ourselves,
The infrastructure X Factor is about delivering long term benefits and outcomes sooner; it is a non-verbal language that quietly but powerfully shapes our lives for the better.
But too often the infrastructure X Factor does not get a chance to be activated.
Shifting to a Stewardship mindset
Ladies and gentlemen, I am concerned that around the world the infrastructure industry has lost its clarity as to the fundamental reason for what we do.
It is my opinion, that purpose should be…
…. to build and manage infrastructure assets and services that improve quality of life, both economically and socially so that we have stronger and more vibrant communities and economies.
Many of you could be thinking, well of course that’s what we do – by building more infrastructure. But what if the assumption that more projects leads to better infrastructure outcomes is flawed? What if it causes us to be complacent?
The time has come for our professional contribution to infrastructure to change; starting with a shift to a stewardship mindset – if the long-term impact of our work is to be taken more seriously.
Our research over the past 10 years point to a failure in the industry to properly recognise that customers matter, and in extreme cases there is a denial they actually exist at all.
In fact, there are many organisations today that regard the people they are providing services to as simply ‘users’ rather than customers.
One CEO of a very large and nationally important infrastructure asset in Australia correctly pointed out that a ‘user’ in colloquial English is someone who uses illicit drugs.
Could I be so bold to ask whether your infrastructure service is good enough to cause your customers to trust your organisation if prices need to go up?
Or would your customers mobilise to protect your organisation should the government seek to change a policy that maybe adverse to your organisation?
I can try and persuade you of the importance of customers, but if there is a reluctance to even identify them by name then we have an even bigger problem.I know many of you come from very large infrastructure organisations – some of which may even be monopolies.
However, as our economic and social circumstances change, it is obvious to me that the idea of a safe and untouchable monopoly without accountability to its customers is rapidly breaking down.
If your customers turn against you, your longevity as an owner or operator will be very limited. Indeed, many large infrastructure organisations around the world are learning the consequences of political risk that result from failing their customers.
Moreover, technology has the power to fundamentally change your relationship with your customers, for better or worse. Without attention to your customers changing needs it is impossible to adapt and stay ahead so that you may find yourself with an out of date business model.
To help you navigate these challenging times, the best strategy is to get closer to your customers and stay on the right side of your customers as they are your greatest asset.
It is for this reason that Customer Stewardship should be central to your organisation’s change program.
Customer stewardship refers to the way infrastructure owners and operators continuously improve to create benefits for customers and stakeholders over short, medium and long timeframes.
It represents a critical capability for ensuring the continued relevance and improved performance of infrastructure.
At the same time, Customer Stewardship is a valuable credential for an infrastructure organisation to demonstrate its competitive difference with governments, regulators, institutional investors and the community itself.
Customer Stewardship Accreditation means that an owner/operator is seeking out opportunities to adapt and change its services to meet the needs and preferences of customers.
That is because Customer Stewardship is about creating a culture to adapt and be customer centred. To be successful requires cooperation and commitment that goes beyond the traditional boundaries of the organisation. It will need to reach deep into supply chains and wider networks.
For this reason, we have also found that when an organisation is in pursuit of customer stewardship, they will typically bring the wider supply chain with them including government policymakers, designers and engineers, financiers, institutional investors, legal advisers and so on.
However, when customer stewardship is absent, too often this provides an ideal environment for the growth of corruption, environmental neglect and social division.
Concerns about the environment, sustainability, human rights and community impact are becoming greater and, when left unchecked, they fuel public distrust on the one hand and limit your growth opportunities on the other.
Cycle of trust
In Customer Stewardship language, we talk about the infrastructure cycle of trust.
That is, where owners and operators of infrastructure enhance economic performance and social impact based on three essential elements:
One, by building up stronger, more resilient relationships with customers and stakeholders.
Two, by providing reciprocity in the form of relevant, easy to access information and services that are effectively priced, and
Three by including customers and community perspectives and insights in the management of the assets and services.
The cycle of trust is important in my view, but first you must believe that it is good for your business or your government agency for it ever to get started.
The customer stewardship cycle of trust is the DNA that powers the Infrastructure X factor.
Whatever your decision about the priority of customers, governments in OECD countries are increasingly seeking to protect themselves from community anger where infrastructure services fall short.
That could mean that governments in the future will increasingly look at a company’s track record with customers when deciding how much regulation to apply.
Government’s will also consider whether concession holders have been authentic in applying their values to customers and stakeholders in current or past contracts when deciding who can own assets and who can operate them.
This is already happening in Australia and I would argue this will become increasingly important for the future of infrastructure.
Your organisation should be part of the solution today by making change happen based on a positive relationship with customers, rather than playing catch up after more regulation has been imposed on you by government as a form of restraint or punishment.
Customer Stewardship Checklist
So much of what we do in infrastructure is an essential service to the economy. That means when services fail, like energy black-outs and water shortages, there are not only unhappy customers, but systemic risks are unleashed that undermine the health of the economy and community living standards.
Getting it wrong means more regulation, and less trust of private sector owners and operators and government. As an industry I encourage you to be a leader for positive change and ‘step-up’ as a customer stewardship champion.
This means you will guide your organisations to continuous improvement and the creation of strong, vibrant long term outcomes for your customers, communities (and private shareholders where they are involved).
The Customer Stewardship checklist I am about to outline is offered as a process you can use to cross check and validate that your organisation is ‘customer healthy’ and can demonstrate key vital signs of stewardship.
Customer Stewardship Pillars
Customer Stewardship is both a discipline and practice. It directly supports the development of customer trust, loyalty and superior performance of your organisation and requires the adoption of eight pillars are covered by the checklist.
- Engagement – with stakeholders to understand their needs and inform decision-making across the organisation.
- Ambition – setting goals in terms of customer benefits.
- Alignment – of people and resources to ensure goals are achieved through organisation-wide commitment to the customer and continuous improvement.
- Adaptiveness – to future demands, responsiveness to future opportunities and the ability to meet long-term customer benefits.
- Connectedness – involves working beyond institutional boundaries to add value for customers from a holistic (whole of journey or network wide) perspective.
- Informed choice – providing open data to enable entrepreneurial opportunities to add customer value and equip customers and stakeholders with the necessary information to choose wisely.
- Transparency – Providing for data openness and accessibility to enable dynamic and entrepreneurial processes for both opportunity and need identification for capital and operating spending.
- Sustainability – Ability to meet the needs of the present without compromising the ability of future generations to meet their own needs. This encompasses environment, social and governance considerations.
We have a range of organisations in Australia – both public and private – all actively practicing and reporting on customer stewardship. They do this because there is a commitment to grow their organisations with their customers and for the community they serve.
They know that trust is earned, and they must demonstrate trustworthiness continually and consistently to retain the privilege of continuing to serve their customers.
When happy customers and communities are achieved, as a natural consequence that means better business, and more opportunities to grow – creating a virtuous cycle of customer stewardship.
On that note, there is always more to do when it comes to infrastructure X factor – there is no room for complacency. Our societies are rapidly changing, evolving and so must we.
But making this a positive factor in your organisation’s future depends on whether you are strong enough and capable enough to be humble towards infrastructure customers. That is, to listen, share information and have a strategic conversation with them so you and your customers can both learn together.
Do this well and you will almost certainly be in a state of trustworthiness with customers and the infrastructure X Factor may well visit you sooner rather than later.
Thank you, ladies and gentlemen.
Customer Stewardship and Funding Infrastructure Panel*
* Garry Bowditch with fellow panelists from the AusRail 2019 Conference – Customer Stewardship & Infrastructure Funding panel. It was a pleasure to speak on the industry panel with such an insightful group of fellow panellists – Marion Terrill (Gratton Institute), Emma Thomas (PWC) and Peter Colacino (Infrastructure Australia) and chaired by Benedicte Colin (CPQM).
Customers can help crack the rail funding dilemma
Shifting the rail industry mindset to customers is the key to unleashing a fresh wave of innovation and creativity that will unlock many doors including building customer trust and underlining future funding possibilities.
That was CSA’s Garry Bowditch’s central message speaking at the Australian Rail Association annual conference AusRail 2019 earlier this month.
“Customers are fundamental to the future of rail funding. But the industry and its regulators must abandon the notion of public transport ‘users’ and enable the adoption of a customer mindset”.
There is a clear consensus that connectedness is vital to the economic and social wellbeing of Australia and that rail can and should play a bigger role in connecting our cities and regions.
While the scope for rail to do more of the heavy lifting in improving productivity was well argued by panellists at the recent AusRail 2019 Conference, the farebox for passenger rail dramatically falls short of covering its costs.
Cracking the rail funding dilemma has too often looked to government to fill this shortfall which has in turn constrained the development of more enduring rail funding solutions that could flow from linking user charges to service outcomes.
A fundamental inhibitor to getting users to pay their way is that higher prices do not necessarily equate to better services and, in many cases, can be associated with a loss of quality in the form of lower frequency, more crowding and lack of reliability.
Perhaps a good starting point is to abandon use of the term ‘rail users’ as it may imply a lack of accountability for service quality or, worse still, a take it or leave it mentality.
By staying close to your customers and creating services that customers see value in is a very valuable investment in your organisation’s stewardship to navigate the future.