UK Water Company Innovation Rankings 2024

Last week the Water Innovator Alliance launched their 2024 innovation rankings. This post delves into the analysis in more detail.

The WIA is a group for innovators, start ups, scale ups and new to the water sector organisations to come together and navigate the complex world of the water sector.

In 2023 the innovation rankings used a comparison of water company performance in the British Water survey, innovation section and the ratio of Ofwat Innovation Fund projects led to projects partnered.? The resulting scatter plot allowed companies to be ranked in three categories: Leading, Upper Quartile and the Long Tail.

For comparison purposes I have repeated the approach for the 2024 data. The arrows show the companies that had the biggest movement.

The 2024 rankings use similar but subtly different datasets and a completely new approach to the rankings.

Since the Ofwat Innovation Fund was first announced before the pandemic, the innovation maturity of the sector has developed a long way.? As we reach the end of the current AMP we can see how far it has come. The proposals for AMP8, show how far it still has to go. The AMP7 driver was to kick start the delivery of innovation, create collaborative teams and invest in solutions and ideas that would not have otherwise moved forward.

The challenge for AMP8 is to keep moving forward and add accessing value from the successful innovations tested and trialled. To this end Ofwat are adding much more significance to the value generated in their proposals for the OIF in AMP8. A specialist provider will be tasked with measuring the value generated by the projects in the fund for the water companies.

Accessing value requires the water companies to adapt even more, beyond their innovation teams, into their core businesses to support them to adapt and adopt successful trials to the needs of their organisations.

There are hints of how the water companies will go about this development in the data already.? The 2024 rankings aim to provide an insight to how each company’s innovation philosophy is developing, based on the available data.

The rankings may be of use to innovators depending on where they are on their journey, and what they hope to achieve in an engagement with a water company. It may also help water companies when they are looking for effective collaboration partners for new projects.

The 2024 rankings are organised as a 2x2 matrix. The four boxes are: Accelerators, Followers, Incubators and Validators. This based on the innovation adoption scores in the British Water survey, which is taken to represent whether water companies are more effective at testing or implementing innovative solutions.? The other axis looks at whether the water company tends to lead or partner on OIF projects.

A vibrant and effective innovation ecosystem requires participants to be spread across the four quadrants. So this year we are not ranking the companies or placing one quadrant ahead of another.? The relevance of each quadrant to an innovation or organisation will depend on the individual requirements.

Quadrant Definitions

Accelerators: Companies in this quadrant have tended to take the lead role on OIF projects, as well as scoring highly on the adoption of innovation questions in the British Water Survey. Companies in this quadrant are a good starting point if you have an innovative solution that is almost ready to scale, but needs a final review.

Followers: This quadrant is characterised by companies that tend to partner on Ofwat projects, and have a higher score for implementation. These companies may be most appropriate for innovators that are looking to scale up their solutions across the sector.

Incubators: The primary characteristics of water companies in this quadrant is that they are tending to lead innovation projects that are earlier in their development journey, likely to be first use cases or new to market technologies. Innovators with novel solutions may find the companies in this quadrant more receptive to their ideas.

Validators: Water companies in this quadrant are interested in new solutions to challenges, but are looking to be the partner, or second test of the idea than taking the lead. Companies in this quadrant are likely to be most interested in innovations that already have a lead partner or need a second demonstration to prove the solution reliability.

While the available data has placed each water company in a quadrant, this does not mean that it is representative of the whole organisation or the capabilities and capacities of their innovation team.

2024 Rankings

The chart below shows where each of the water companies plot within each of the quadrants, based on the available data. You might not agree with where each company has been positioned, there are some surprising ones to me as well. There are likely to be variations between teams within organisations. The British Water scores are based of subjective views of suppliers which are likely to be influenced by wider sector headlines and their specific experiences and understanding.

Ranking Analysis

I want to pick out a couple of companies and consider their position in the quadrant. Firstly, NWG (Northumbrian Water Group) , using the old methodology they scored highly on both axes, but when we focus on the implementing/adoption BW questions they score much lower. I think there are two linked reasons for this: the success of their festival means that thousands of ideas are generated which means that they are recognised for supporting idea creation. They also know how many innovations their business is able to absorb at any one time, and know how long it takes to achieve. Nigel Watson and Angela MacOscar run an effective innovation process but from the outside it simply looks like most ideas do not make it to implementation.

Secondly, a couple of the companies on the right hand side of the chart are making big changes to their innovation teams. Both Wessex Water and Southern Water are changing their personnel with new people heading up their innovation functions, Wessex are appointing a dedicated head of innovation and Southern have restructured their team under Nick Mills.

Final Comment

The OIF is not year five years old, and we are yet to see significant value generated by funded projects – mostly due to projects still being in process, and the trials funded often end a long way short of being in a scalable state. This means that there is a heavy caveat on the vertical axis in the rankings, that we will hopefully be able to improve as we move through AMP8 and the proposed value measurement process starts reporting.

Many thanks to British Water for completing the survey every year, without which the survey wouldn't be possible. Also thanks to Ofwat for sharing the winners and partners information in an easily digestible format which made 2024 much easier to process.