Abstract:
Explicit approaches to risk analysis within the water utility sector, traditionally
applied to occupational health and safety and public health protection, are now seeing
broader application in contexts including corporate level decision making, asset
management, watershed protection and network reliability. Our research suggested that
neither the development of novel risk analysis techniques nor the refinement of existing
ones was of paramount importance in improving the capabilities of water utilities to
manage risk. It was thought that a more fruitful approach would be to focus on the
implementation of risk management rather than the techniques employed per se.
Thus, we developed a prescriptive capability maturity model for benchmarking
the maturity of implementation of water utility risk management practice, and applied it
to the sector via case study and benchmarking survey. We observed risk management
practices ranging from the application of hazard and operability studies, to the use of
scenario planning in guiding organisational restructuring programmes. We observed
methods for their institutionalisation, including the use of initiation criteria for applying
risk analysis techniques; the adoption of formalised procedures to guide their
application; and auditing and peer reviews to ensure procedural compliance and provide
quality assurance.
We then built upon this research to develop a descriptive1 capability maturity
model of utility risk analysis and risk based decision making practice, and described its
case study application. The contribution to knowledge of this stage of the research was
three-fold, we: synthesized empirical observations with behavioral and normative theories to codify the processes of risk analysis and risk based decision making; placed
these processes within a maturity framework which distinguishes their relative maturity
of implementation from ad hoc to adaptive; and provided a comparative analysis of risk
analysis and risk based decision making practices, and their maturity of
implementation, across a range of utility functions.
The research provides utility managers, technical staff, project managers and
chief finance officers with a practical and systematic understanding of how to
implement and improve risk management, and offers preliminary guidance to regulators
concerning how improved water utility governance can be made real.
