Delivering continuous improvement
In 2008/09, we delivered what we set
out to do. We continued to focus on
water and to improve our performance
across the group.
Delivering continuous improvement across our group
Last year I talked about the revitalisation of Severn Trent and
our plans to continue building on the improvements we had
been making. This year we have been delivering continuous
improvement throughout our businesses and making it part
of the way we work every day.
Our approach of always challenging ourselves to do better is
designed to ensure that we take our businesses forward in a
responsible and sustainable way and one that delivers for all
our stakeholders.
Delivering continuous improvement in Severn Trent Water
We said to our customers that we would make fewer mistakes, deal
with their calls more effectively and reduce the number of causes of
complaint in our business. We said to Ofwat and the Environment
Agency that we would meet our leakage targets, deliver improved
security of supply and reduce pollution incidents. We said to our
investors that we would continue to deliver operating (opex) and
capital (capex) efficiencies and maintain our progressive dividend.
We said to our stakeholders that we would operate to the highest
standards of governance. We said to our people that we would
continue to improve what it’s like to work for Severn Trent. We said
we would do these things and we have done them, in line with our
ongoing commitment to be the best water and waste water company,
with the highest standards, the lowest charges and great people.
In 2008/09, we continued to improve our performance across
the board. The 20 Key Performance Indicators (KPIs) remain
the primary basis on which we measure and demonstrate this
continuous improvement. They are indicators we identified
as important to our customers, regulators, employees and
shareholders. I am pleased to report that we are now achieving
upper quartile performance in 14 of our KPIs, with 5 at median
and 1 at lower quartile.
The professionalism and commitment of our people has enabled
our achievements. We have given and intend to continue to give our
people the encouragement, training, tools and techniques to ensure
it is a fundamental everyday part of the way we work, finding ever
safer, better, faster ways of delivering our Key Strategic Intentions.
As set out in our 25 year Strategic Direction Statement we are
becoming ever more customer focused and ambitious for efficiency
improvements that help produce lower charges and drive process
improvements that help raise standards. In support of these, we
continue to commit to improvements designed to attract, retain,
develop and reward our great people.
Over the last 12 months we have also been working on our fifth
Price Review (PR09), for the period 2010-15 (AMP5) undertaken
by Ofwat. We believe preparations for PR09 have gone well. There is still a way to go in the regulatory process, but we have what
we believe to be a high quality, holistic and balanced plan that
has customers at its heart, is supported by all the key stakeholders
and should enable a fair and appropriate return for our investors.
We talk more about our plan on page 6 of this report.
Delivering continuous improvement in Severn Trent Services
Continuous improvement is at the heart of Severn Trent Services,
our international water and waste water solutions business.
It is the engine driving the Severn Trent Services growth plan
focused on four key strategic initiatives: continuing the geographic
expansion of products and services, expanding the scope of
operating services around the world, enhancing products and
operations to improve effectiveness and efficiency, and continuing
to develop new technologies that are at the forefront of water and
waste water solutions.
Looking ahead
As Severn Trent Water progresses into the final year of AMP4, we
are driving performance improvements across the business. These
improvements, measured by our 20 KPIs, are designed to deliver
higher standards and efficiencies; enabling us to meet the
challenges and opportunities of the current economic environment
and provide the momentum for delivery of our PR09 plan.
We are very aware of the challenging economic climate and what
that means for our customers, for our supply chain and for our
future funding.
We are also very conscious of our corporate responsibilities, not
least in playing our part to address the increasing challenges of
climate change through our water resources, our waste processing,
our energy use and our engagement with our communities. We are
committed to achieving carbon reductions through our renewable
and energy efficiency programmes which are intended to exceed
the government targets to 2015.
In the future, the nature of our industry is bound to change. We can’t
be sure exactly how, but we can and will play our part in shaping
developments – for example around competition in the UK regulated
industry. We have clear ideas about how it might best be developed
in a way that both benefits customers and addresses regional water
supply imbalances. We are actively discussing these ideas with Ofwat
and other interested parties. Whatever the future holds, we will refuse
to accept the status quo and intend to focus on water, on our core
skills, on aligning ourselves around our key processes, and having
excellent relationships with our key stakeholders.
In Severn Trent Services we will continue to build on the
improvements we have made this year. Our focus will be on growth
opportunities through our four key strategic initiatives and driving
continuous improvement in the business.
Severn Trent is a high quality business whose investment
programme drives strong growth prospects. The management team
has a clear and focused strategy and is engaged in the single
minded pursuit of higher standards as the means to achieve both
higher levels of customer satisfaction, and also sustained strong
financial returns to shareholders.
Click for the full
Severn Trent Annual Report 2009.
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