Why outcome-focused models matter in the utilities sector

Why the utilities sector needs to rethink how it works

The utilities sector – covering energy, water, and environmental services – is at a turning point. With growing public scrutiny, tighter regulations, and the urgent need to modernise, many companies know that their old ways of working just aren’t cutting it anymore. 

For years, these companies have operated on a project-by-project basis, but there’s a growing recognition that this model no longer meets today’s demands. Instead, there’s a shift happening towards an outcome-centric approach where continuous improvement and meeting long-term objectives take precedence.

A move to outcome driven models 

Traditionally, utility companies gather a team, tackle a specific problem, and then disband once the project is done. This has worked for the most part, but it’s far from ideal in the long run. The biggest issue is that you lose all the knowledge and expertise that the team builds up during the project. 

For example, consider a team that spent months developing an advanced predictive maintenance system for a water utility. Throughout the project, the team learned specific details about how different types of equipment react to varying environmental conditions, such as which factors most often lead to failures. If the team is disbanded after the project, that nuanced knowledge – like the best ways to calibrate sensors or the optimal times for maintenance could be lost. When a new team picks up the beta phase of this project, they might need to relearn or rediscover these insights, leading to inefficiencies.

The shift to an outcome-based model is really about changing this mindset. Instead of forming teams for short-term projects, you fund teams to develop and maintain ongoing customer or business objectives. This isn’t just a small operational tweak. It’s a complete rethink of how we approach work in this sector. The old opex / capex model, where capital expenses are distinct from operational expenses, starts to blur. You end up with teams that are now focused on solving a specific, long-term problem, constantly refining their work. 

The benefits of an outcome focused approach

In my experience, moving to this model offers some clear benefits: 

1. It allows for much better continuity. Instead of building something and moving on, teams stay with the product, continually improving it. This leads to better quality and more consistent innovation. 
2. When teams focus on a specific problem or product over the long term, they develop deep expertise in that area. This knowledge is invaluable because it allows the team to anticipate issues, innovate more effectively, and ultimately deliver better results.
3. This model aligns incentives better. When teams are working on a long-term product, their goals align more closely with the company’s overall business objectives. This helps ensure that everyone is working towards the same outcomes, which can drive better performance across the board.

Switching from projects to outcomes isn’t just about changing how work is structured – it requires a significant cultural shift as well. This shift can be tough, especially for companies in this sector who are used to more traditional, top-down ways of working. And it doesn’t happen overnight. But if you want to be successful with this new model, you have to empower your teams and give them the tools they need to succeed. Jon Ayres’ blog Why “agile, lean or waterfall” is the wrong question is a good resource for further reading on this topic.

From problem statements to solutions

Transforming how you work isn’t without its challenges. One of the biggest hurdles is simply getting started. A lot of companies know they need to change, but aren’t sure where to begin. 

In my role as a strategic advisor, I’ve helped many companies navigate this initial phase. Often, it starts with consolidating problem statements. Companies know they want to improve, but they’re not always sure how to articulate their challenges.

For example, some of the common problem statements I hear regularly include:

• “We want to go faster, but we don’t know how.”
• “We need to scale but lack a clear strategy.”
• “We understand agile principles but can’t apply them organisation-wide.”
• “Our engineering teams aren’t collaborating effectively with the business.”
• “We’re building features that users aren’t using.”
• “Our engineering teams are over-engineering everything, causing delays.”

That’s where we come in – Made Tech help organisations clarify their problems and develop a roadmap for moving forward.

I recently worked with an organisation that was struggling with the quality of its codebase. The product team felt that development was taking too long, but they couldn’t pinpoint why. We worked together to identify the core issues and develop a plan for improvement. It wasn’t just about fixing the code – we needed to change the way the team worked and stop them ‘gold-plating’ everything which was fundamentally what was causing the delays.

Another big challenge I come across is scaling agile practices. Many utility and energy companies have made good progress in setting up agile teams, but the challenge now is scaling that without it becoming unwieldy. It’s about maintaining the flexibility and innovation of smaller teams while expanding their practices across the organisation.

Are SI’s consigned to history?

Another important strategy is moving away from relying too heavily on large systems integrators (SIs). Traditionally, utilities and energy companies have outsourced a lot of their IT work to large SIs, but recent regulatory changes are pushing them to take more ownership of their technology. While large SIs will still play a role, there’s growing interest in working with smaller, more innovative organisations that can bring fresh ideas and who can work at pace.

What’s next for the utilities sector?

As the utilities sector continues to evolve, the shift from projects to outcomes is a significant step forward. Organisations that truly understand what their problems are and have the right approach to tackle them, will be better positioned to handle the challenges of the modern utility sector and succeed in the long term.

It’s not just about changing how work is done – it’s about changing how organisations think about their work. By focusing on outcomes and empowering teams, they can drive better performance, build deeper expertise, and ultimately deliver more value to their customers. 

If you’d like to find out more about how we can help, take a look at our experience in this industry or get in touch.

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