Future organisation

We have identified that delivering our future strategy will require our organisation to change significantly. In particular, transitioning to a fully EBR approach will inevitably require us to develop a new range of skills and capabilities. The way we worked in the past will not be able to deliver the new regulatory framework, which is based on trust and confidence, rather than the traditional regulatory ‘parent-child’ approach. 

The EBR approach will require us to:

• behave in a way that is consistent with the principles of EBP;
• identify and promote best practice across the industry;
• closely tune in with stakeholders’ views and levels of confidence;
• be prepared to call out inappropriate behaviour and performance and engage in open and robust dialogue;
• focus on the long-term delivery of benefits for customers and the environment, rather than short-term target setting and monitoring;
• be capable of delivering high-quality work to overseas customers.

As outlined under Outcome 9, in planning for the next regulatory period, we also need to take account of succession management, recognising the need to bring through talent at all levels and develop the next generation of leaders. This will build on the progress made during the current Corporate Plan period to strengthen our senior leadership team.

We have identified six key areas of internal organisational development 

Establishing robust recruitment and retention approaches, particularly at the graduate recruitment level. We need to ensure an ongoing throughput of high-quality talent into the organisation.

Growing the management capability of the senior team within the organisation to manage effectively an expanding organisation with an increased throughput of junior analytical staff who will require supervision, coaching and development.

Providing leadership development for the senior team to ensure executive succession for the future; recognising that experience tells us that we will need to grow this capability from within the organisation.

Developing understanding and capability across the office of the new behaviours and approaches required to deliver economic regulation under EBR/EBP.

Increasing flexibility, knowledge and communication across the office by integrating functions and avoiding ‘silos’ through training staff to operate effectively across analytical, investment, retail and Hydro Nation functions. In this regard the recent establishment of a Central Office will play a key role.

Enhancing our external communication capability, both to improve our outward communication (including the website and social media presence) and to maintain an ongoing active dialogue with key stakeholders to understand their perceptions.

Consultants

We have been reducing our reliance on consultancy time over the past few years and intend to continue to use less and less of this resource. 

The Commission requires wide-ranging advice to make appropriate assumptions about the reasonable costs that it should allow for in setting prices. Its assumptions must be robust to external challenge, particularly as Scottish Water has the right to require the Commission to make a reference to the Competition and Markets Authority.

We must also ensure that our processes and decisions can withstand judicial scrutiny. Supplementing the Commission’s expertise with that of outside experts provides significant reassurance of the quality and independence of our work.

At the start of the regulatory control period, we will competitively tender and award a legal framework contract and an economics and finance framework contract. These will allow us to access appropriate economic, financial and legal advice. This will ensure that we can respond flexibly and cost-effectively to the demands of the Strategic Review. We plan to award these contracts for an initial three-year period, with the option for an extension of a further three years. The individuals and consultancy firms that we engage will be recognised experts in their fields.