The Future of Water: Technology, Sustainability, and Innovation

Saurabh Sehgal   0:10
Hello and welcome to Movate talks – Business insights unplugged.
I’m Saurabh Sehgal your host and sales leader at MOVATE.
This is the first episode of our Business Insights Unplugged series. The technological landscape around us is changing rapidly.
Technology trends of today will shape our future.
That tomorrow our purpose is to bring thoughts and perspective from technology and operations leaders, industry analysts and visionaries on how these technology trends will help evolve their businesses and communities. When we conceive the idea of the podcast, we were certain that our inaugural guest should be someone who.
Embraces cutting edge technology.
Inspires groundbreaking ideas and cares deeply about the well-being of communities and the planet.
So without further ado, I present to you our first guest for the series, Nigel Watson.
Nigel is the CIO at Northumbrian Water Group, where innovation and sustainability are at the forefront of their mission retake.

I’m excited to hear your views on water, climate sustainability and the impact of emerging technologies.

Nigel Watson   2:19
Now, that’s quite the intro.
I’m gonna struggle to live up to that, but I’ll try. And I think the honour is all mine.
So great to be with you this afternoon, Saurabh.

Saurabh Sehgal   2:30
Thank you, Nigel.
So, Nigel, before we dive into the topic, tell us a little bit about your journey to technology leadership, your role at Northumbrian Water Group and your vision for the business.

Nigel Watson   2:43
I’m in my 60s, but so I’ll keep my journey.
Brief but safe to say I had some good luck along the way and I said yes to a bunch of things and I think that’s probably been quite key to my career and the experiences that I’ve had. But it started when I was 17, I decided.
To leave school, I thought I knew everything I needed to know.
The hubris.
That only a 17 year old could have.
And my mom and dad said it’s 3 million people unemployed.
This was 1981.
That’s an interesting decision, son.
And I was lucky enough to land on my feet when I was offered a yacht scheme, which I guess I don’t know what the equivalent would be these days, but there was a sort of YTS and it was a scheme, basically where an employee took you on for.
Six months and taught you something. And I had the opportunity to do either accounting or.
Computer programming.
And I thought, gosh, that accounting just sounds boring.
So I’ll have a go at.
Computer programming instead, and the rest, as they say, is history.
I’ve had the fortune of working across a bunch of different sectors so.
Mostly started in sort of financial services. Been in high tech.
Been in travel and telecoms and now I find myself at the in my autumn years in the water sector, which I absolutely love.
I think the purpose.
Is really the thing that kinda gets me out of bed these days. But the other thing is I’ve had the good fortune to work around the world.
I think I’ve worked in about 30 countries, lived in six, and I think that that really has been.
The great bit of good fortune on my part to have been able to do that throughout my career.
Yeah. Now Northumbrian Water Group and loving it.

Saurabh Sehgal   4:43
Great. Tell us a little bit about the company itself and your vision for the business.

Nigel Watson   4:50
Yeah. So as Northumbria Water Group is a is a mid sized water utility.
So we operate in the Northeast and we own Essex and Suffolk Water where we do clean water only. So we provide clean water and wastewater services in the Northeast, clean water only.
In the South, we have about four and a half million customers. 2.1 million households revenue of around about a billion pounds a year. So with 3250 employees just to give you some idea of the scale of the.
Ation with a supply chain who work for US day in, day out.
With about for the 4000 people, but that the organization due to the pressures on the industries about to increase. But I guess we’ll get to that as we as we go through the podcast. But that’s how we stand today.
The vision I think you’re referring to there is I think it was five years ago.
Came up with this vision to be the most digital water company in the world. It’s.
Is the signal more than anything else?
I suppose is is more intended to be directional and a generalised ambition rather than. I mean obviously it’s not something that you can go out and measure, certainly not very easily but but wanted to we wanted to send a signal that you know, we would embrace leading edge.
Technology that we would look to technology for answers as well as you know some of the other methods that we might use to try and solve problems so.
That was that was really what it was about, and it came on the back of.
Fairly significant investment that we’ve made in, in digital technology as part of our transformation programs, firstly transforming the customer experience and then transforming how we do work and asset management.
And when we deliver those programs, I guess we’d put in place a really nice architecture.
Everything was integrated services, oriented largely in the cloud and.
That was a lot of heavy lifting that was needed to get that job done, but then we were into this phase where I thought we can have.
More fun and I guess fun to me, comes in, you know, speed to value.
So we were able to look at user experience start to look at AI and in particular back then machine learning and start to look at some sort of smart system, smart networks, digital twins and things like that that we could build on top of that Nice found.
That we created.
So that was the essence of the of the vision. To make NWG the most digitally enabled water company in the world. We’re adapting to the impact of climate change and.
More clearly, and the earlier we can see those signals, the better off we are in terms of being able to be resilient to those impacts.
So that was really why we set that that vision in the first place.

Saurabh Sehgal   7:54
Thank you for sharing that. Nigel and I do love your vision for the business. The world’s most digital water company. That must be quite inspiring for your team.
We often talk about innovation in consumer tech or the way people communicate and connect.
Tell us how you personally define innovation in the water or the broader utilities sector, and how you’ve led with a culture of innovation at Northumbrian Water.

Nigel Watson   8:20
Yeah, I think look the best definition of red of innovation is it’s the the process of getting value from new ideas, right and so.
I think it’s simple and it works.
In our business, we have three change leavers. Let’s just call them that, right. So.
The first one I mentioned a little bit already, which is large transformation programs.
These might run for three years or even more.
I mean, we found it certainly takes a long time to embed change from a transformation program into our business, so.
And then then we have continuous improvement AKA product management. And I think that needs no introduction, which leaves innovation.
And we categorise something as an innovation if we’re the first water company in the UK to do it, if somebody else has done it already, we should just go and talk to them, right.
We’re not in a competitive industry, so.
We would expect that to be a lower risk, but when we’re the first company in the UK to do it, that says this is something that’s coming from another industry.
Or it’s come from another country.
It’s never been done in perhaps our climatic conditions before, and there’s more risk and that really is is what that whole sort of governance framework around innovation is all about.
We have a defined success rate of four out of 10.
That’s sort of a target and in actuality, you know, having had eight years of experience of running that pipeline, that’s about where we are.
Which means some things will fail.
And we’re OK with that because we are highly regulated entity and we you know we’re not Google or we’re not one of these businesses where one in 100 is OK.
I think that would be. It would scare the horses, right?
So, but four out of 10, we’ve made ourselves comfortable with that.
It delivers a very nice ROI and we have a very mature innovation program.
Of eight for eight years. It’s probably any moment in time.
Got about 150 ideas in it.
It delivers a lot of value through to the business.
Now we can see that idea to value takes about three to four years, so we’ve got nice stage gate processes.
It has a lot of visibility.
Team level, etcetera, etcetera.
So we’ve worked hard to to embed it in our organization like that, but it really does feel.
Like second nature to us now.
I don’t want to say BAU because it’s definitely not, but it does feel you know.
Very, very ofay with the processes, the language, and and all of the measures. And it’s definitely embedded in our organization.

Saurabh Sehgal   11:02
That’s wonderful, Nigel.
And I know there’s one more thing.
Very close to your heart that has been driving innovation and spearheading your efforts within the industry, which is the annual NWL Innovation Festival.
Now, I’ve been very fortunate to attend this festival several times over the years.
I was there in July and I couldn’t help be amazed and impressed by the scale of the festival and the impact it is driving, not just for NWL.
For the sector, communities and the environment.
I think the Innovation Festival has produced some really fascinating work and projects like River Deep Mountain AI. So yeah, talk us through a little bit more about how the idea came about and your journey from idea to execution.

Nigel Watson   11:33
Yeah.
Yes. So the festival was an idea I had in the shower, so.
A nice short shower I should hasten about, but I think so. We we we started off on our journey of innovation.
Well, it’s probably nearly nine years ago now and.
My boss said I want method not magic.
You know, go out and have a look in the world and see how people innovate, going and study the processes and bring those back here. And we landed on this.
Very commonly used approach called design thinking.
I bought the book Sprint written by Jake Knapp and we decided to OK.
Let’s have a go at Sprint.
And so we defined a problem. I think it was around around the billing process.
And and how might we type question? And then we assembled some people, some people from our organization and from out with and we ran through that sort of five day process generate some interesting ideas and thought that’s that is genuinely different actually from something we might have done.
You know, with our with our previous approach and by ourself I suppose more to the point.
So we we were running sprints.
At a pace of about one a month and we we ran a data hack as well. Along the way, we put 10 years worth of asset maintenance data into a cloud environment and ran an event at Newcastle Uni and had about 120 data scientists turn.
Up, which just blew my mind.
We bought beer and pizza and prizes and that felt like a very insightful exercise to do as well and so.
We would.
We would.
We were jogging along. I suppose, you know, had got some methods, had had a bit of success.
And my boss said to me, I want it to be much more impactful.
I want you to think much bigger.
I want you to change the perception of the region.
I want you to change the perception of the industry and I do my best thinking.
I think when I’m asleep, so I, I said.
I can’t answer that right now, but I think it was literally the next day I was in the shower and I thought, well, I wonder if you were to mash together those innovation techniques I just talked about with the idea of a British summer festival.
Because we’re good at, we’re good at summer festivals in this country, right?
Trying to think I was racking my brain.
What are you really good at?
And I used to take my kids along the festivals and the very eclectic events.
You know, you might find yourself in the Women’s Institute tent learning how to make jam and then chatting to a celebrity chef, learning a new dance. You might at some point be, I don’t know, dressed up and and you come away just feeling a little bit better.
About life.
And so I wanted to create that kind of environment and then put innovation in it and that was.
Ran that idea past my my boss and she said yeah, do it. Do it.
And we did in so 2017, we ran the first festival and we had six sprints and a hack and about 1000 people. And as you said, we just ran our festival.
We always run it in July at Newcastle Racecourse and that was our eighth event and I think we had 50 sprints, 3000 people.
And yeah, we have hip hop blingo. We have silent discos.
Free ice cream, but in the middle of all of that fun.
We’re solving some really knotty problems for society and the environment, and so if you boil it all down the innovation festival, I mean it is so much more than this. But if you really wanted to boil it down, it’s our idea generation process.
So it generates 50 or 60 ideas that go into our into the pipeline I talked about.
But like I said, it is definitely more than that.
I mean, I think it’s a, it’s a wonderful sort of coming together.
Of clever human beings who have.
Want to be part of solving some of these.
Difficult, difficult problems.
And so, yeah, I’m I feel very good about it actually.
I don’t want to say, use the word proud because I hate that word. But yeah, I think it has had a really good impact on our industry and a good impact on our region.

Saurabh Sehgal   16:01
I think you should definitely be proud and so should be the rest of the team at NWL because the festival, I think it’s doing its job fascinatingly well and you set the theme of four out of 10 ideas. And when you have 50 or 60 in the pod.
You can easily aim at succeeding at about 15 or 20, I think, which is tremendous for a sector like the water industry.

Nigel Watson   16:23
Yeah, I mean, you mentioned team there and I should.
I forgot to say ’cause when we first ran the festival. This is I learned my a real big lesson, right?
And and too late in my career, I think.
So I offer this up for younger people and it’s what I refer to as the power of the half baked idea.
And so when I came up with the idea of the festival, we had about three or four months, I think to kind of get it off the ground and run the first one.
And so I literally just said, look, this is basically what I have in mind.
And people went off and did things, and it was in the best way possible, totally out of my control.
And I got to the festival and I was looking around going, who organised the cookery demonstration and people. Does he like the cookery?
I was like, no, I love the cookery demonstration, but I just didn’t know we were doing it. And there were like 100 things like that that people had just organised and it just made me realize when you I I grew up as a coder, right? I mean I.
Started life, as I mentioned in computer programming.
You’d grow up with the mentality of, well, your code has to work.
No matter what, right?
So if if people are doing bad things, your code should still be robust and it should function in unhappy use cases, etcetera, etcetera.
And so I guess I probably carried that thinking a little bit into my into my leadership career.
When I ran the festival for the first time, I didn’t have time to think through all of the possibilities, all the things that might possibly go wrong.
And so I just sort of threw it out on the table.
A vague idea and people added to it right?
And I think.
So that that’s wonderful, right?
Because if you’ve got the thoughts of many people, it’s always going to be more powerful than the thoughts of just one.
But really the the magic of that is that they owned it as well.
They owned it just as much as I did and I think that’s still true today that, you know, I come up each time we look at a festival and get planned for the next one. I come up with a theme.
And then people are off and they go and do things that they go and do wonderful things. And I think it allows them to bring their full selves to work and. And I think that’s really important and it just is.
Yeah, they, they, they have an ownership.
They have a part of that event and they feel, you know, really committed to making it a high quality thing, so.

Saurabh Sehgal   18:53

I remember us saying a discovery is said to be an accident, meeting a prepared mind.
So I think this is a classy example.
It was not just an idea in the shower, it was someone looking for something groundbreaking, something different. And the idea happened to you.
So well done to you and the rest of the team.

Nigel Watson   19:12
And you summed it up in one sentence and I just rambled on for about 10 minutes.
But anyway, there we are.

Saurabh Sehgal   19:19
It’s been great conversation so far, Nigel.
And we are.

Nigel Watson   19:22
Hmm.

Saurabh Sehgal   19:22
We are very privileged, as I said at the beginning of the podcast as well, to have you and shared everything that you have been through in terms of the journey.
So now tell me, Nigel. We live in an era that would be known for the emergence of two significant disruptors of global civilization.
Climate change and AI how does AI contribute to ensuring reliable water supply?
An effective wastewater management under climate uncertainty.

Nigel Watson   19:53
Yeah. So I had a a great conversation on a plane about a year and a half ago, and I don’t know if you’ve ever been on Southwest Airlines in America.
It’s a short trip I was taking and I’m too cheap to pay for one of those priority boarding places. So I found myself getting on the plane last and sitting in the middle and I sat next middle, a middle seat and I found myself sat next to this.
Guy. Who was it?
Run several startups and we had a brilliant and really respectful conversation and his main thrust was AI is an existential threat to humanity, and my main thrust was no climate change is a bigger threat than than AI.
And I got off the plane and I thought to myself.
I should use AI to combat the impacts of climate change for the rest of my career.
That should really be my focus.
And I think you know, when people talk about the Paris accord, there’s a lot of focus on the net zero side, and rightly so.
And you know, we’re big energy users, so we definitely sort of leaning into reducing the amount of carbon and other harmful gases that we put into the atmosphere.
But the bit that doesn’t often get talked about is how do you become resilient in the face of climate change?
And we’re already at 1.2°.
Headed to.
Who knows where and we see the impact of climate change in our business every day.
I mean in small, subtle ways quite often.
And then of course, you get the big the big storms and freeze thaw events and things like that, that are probably more dramatic and noticeable. But all day, every day, climate changes showing up across our business and I think.
If you’ve got and this sort of comes to sensors and the affordability of sensors and IoT comes and things like that are really reaching a point now where it’s it’s possible, economically feasible to do it.
So smart networks, we’re a big believer in smart networks and digital twins and we’re doing, I’ll give a couple of examples if I may.
So we we’re doing smart sewer system in the Tyneside area is the world’s largest smart sewer system.
We believe so.
It will serve 1.1 million people.
It has level and flow sensors, so it’s these. You often have seen them in deployed in networks before, but you know we’re we’re putting 750 of these around our network and then it’s got some real engineering.
So gates and valves and things that can hold and control the flow of water.
And then it’s got a real time digital, well near real time.
So every 5 minutes, the digital twin will be taking the data that’s coming from the network and what’s happening and what’s kind of capacity we have.
And then it will be looking at hyperlocal rainfall forecast and it will be holding back the water controlling the flow.
It’s like a traffic management system I guess.
And what that will enable us to do is to reduce the number of spills that we have, which you know, you doubtless would have heard about in the media and in terms of being a cost effective way of doing that. I mean, it is so, so, so much.
More cost effective than our other option, which is digging massive big holes and filling them with concrete.
So.
And concrete also, by the way, very carbon intensive.
So we are going to really Max out on this idea of doing the Tyneside area first, but then we’re going to take that to other catchments.
And I think that’s just going to be massive.
So the smart network is going to generate a massive amount of data.
There’s no way a human being could possibly process all of that. That’s why digital twins important.
And then and this is one of our guiding principles, when we deploy AI, we leave a human in the loop.
So we will basically be putting options.
Like maybe two options in front of the operator. Would you like to do this or this and and really simplifying those choices for them? So I think that’s a that’s a sort of a sewer system idea. We’ve also got, you know, the equivalent on on our water side.
So clean water side. So for a long time we’ve had a digital twin controlling production and.
Sort of maximising where we can produce water from the treatment works that use less energy.
And then we’ve more recently done some work on sort of treatment in the network. So sampling the water along the on its route, sometimes it takes long routes to a customer’s home and then micro dosing any chemicals that we need to to to make sure that the Water’s tastes great and and is clean and healthy to drink.
So those are just two examples.
I mean, AI is popping up all over our business to be honest with you, Sir.

Saurabh Sehgal   24:43
Great, Nigel and I thank you touched upon very likely. So on three very important themes. When it comes to AI responsible AI in its in its sense human in the loop.
I think it’s super important that we do have that kind of.
Overseeing impact on AI and then data, because here at MOVATE we are leading with AI, we are working on a lot of different projects and initiatives for our clients. And one thing we keep reminding ourselves.
Is that when we talk about data, no data is no AI bad data is equal to bad AI and good data means impactful AI.

Nigel Watson   25:26
Couldn’t agree more in fact.
The 750 sensors that I mentioned.
A lot of companies would have gone with a lot more sensors than that, right?
They mean I have seen examples where other companies in the Moore industry have deployed 20 or 1000 sensors in a network like that.
We didn’t want to do that because we thought it’s better to have less data, but high quality data and having 750 census, what we’ve been able to do is really calibrate them when we install them.
So we run a 17 point check to make sure that the the sensor’s working properly, that it’s giving us high quality data.
And then I mean, a lot of these things are on batteries.
They run on batteries because of where they’re, you know, where they’re deployed in the network. 750 Celsius. We’re able to maintain quite comfortably.
We can go around proactively replace the batteries and so I think that’s it. You know, it’s an example where we’ve really prioritised the quality of the data.
Over the quantity, if you like.
So completely agree, really important human in the loop, 100% agree with that too for a couple of reasons.
One is, I think your models. You know we have those extreme weather events and your models are just not going to know about those, right?
So when when we’ve had Thunder Thursday in the Tyneside area in the past and we’ve had storm arwin and things like that, the people in our business, they stay here a long time, they will remember.
That and they will know actually this this model is throwing up a suggestion now, which probably we should ignore in those moments.
And then I think there’s something about accountability and we gonna sit in the boardroom and go how do we learn from this, you know, what happened?
Let’s do root cause analysis and everybody kind of goes. Yeah, I don’t know the the, the digital twin decided. That’s all we know. I mean, it’s just it’s not an acceptable way to run a critical service, I don’t think.

Saurabh Sehgal   27:28
Absolutely, absolutely.

Looking ahead, AMP eight cycle starts soon.
What emerging technologies do you believe will have the most significant impact and how is Northumbrian water preparing for it?

Nigel Watson   27:46
Yeah, I think.
The short answer is AI.
But I’ll let lt me elaborate a little. So I think I’ve talked a bit about the smart sewer system. We, we are really going to. We’re really making a big bet on that.
And I think with AI was that smart sewer systems going to do is continue to learn to adapt?
To spot those small changes in the patterns of rainfall.
And that’s really critical. The other thing.
So our capital program is doubling in, in ambit.
So we currently spend about normal year 350 million will be somewhere between 700 and 750 million. We need to make sure that so that’s customers money we need to make sure that we spend it responsibly. We need to make sure that.
The projects deliver to cost and we need to make sure that the projects deliver the quality, so we’re putting in place a common data environment so that our whole.
Ecosystem, the whole delivery ecosystem, which is way more complicated.
Now it’s double in size.
Is is operating off of the same set of data, so we’re all looking at the same milestones?
We’re all looking at the same task, et cetera, et cetera.
So we’re putting that in place, which is sort of a fundamental building block. But then we’re looking at the connected construction site and this is where I think the the value out of AI can come in.
So for example, we’ve got CCTV up in on our construction sites, can we leverage that?
Data stream now with AI. So if there were supposed to be 10 people working on that site during the day, were there 10 people working on site?
All wearing their health and safety equipment properly, we were supposed to have two tons of aggregate delivered that day.
Did we have two tons of aggregate delivered so that sort of if you like helping inform us a little better about the progress of the job, but then we believe with AI and sensors we can also do a better job of checking the quality of the build so.
Without examples in the past where the concrete pore wasn’t very good.
We didn’t know about that in time and therefore you know, whole load of equipment’s being built on top of the concrete.
It’s almost impossible to undo but, but we with sensors and AI, we can now check the quality of the concrete pour and make sure that you know we got the right foundations in place before we proceed with the next step of the job.
So I think there are.
There are things like that that AI can really help us with, so I think it’s got, it’s got enormous potential.

Saurabh Sehgal   30:21
Great. This has been a fascinating and insightful discussion.
Nigel, we couldn’t have asked for a better start to our podcast series.
I wish NWL and you the very best as you embrace emerging technologies and build a more sustainable future for the water industry and the planet. Thank you, Nigel.

Nigel Watson   30:38
Thank you very much Sir.

Saurabh Sehgal   30:41
Everyone listening in, please do share your thoughts on the podcast and your views on the impact of climate change and AI in the comments section.

Thank you everyone!