Russell Cooper is managing director of South East Water. He was general manager of Email Electronics and trade commissioner (technology) for Austrade. He has a bachelor of science degree from Melbourne University and a graduate diploma in management from RMIT. He is a Fellow of the Australian Institute of Management.
AIM: How did you begin your career?
Cooper: I started as a chemist in the oil industry. Then I moved to Philips in sales of scientific instruments. I went to Austrade as a trade commissioner in technology. But most of my background has been in the private sector.
AIM: What management training have you had?
Cooper: I did a post-graduate diploma in management at RMIT. I suppose you would now call it an MBA: a bit of law, economics, organisation theory, strategy and computers.
AIM: What is enduring in management?
Cooper: Total quality management and continuous improvement. I also admire the Japanese management philosophy kanban. It is about demand pulling products through, as opposed to having the sales force saying “We can sell 10,000 widgets” and then selling either 20,000 or 5000. With kanban you do not get blowouts and add unnecessarily to costs.
AIM: How has privatisation affected you?
Cooper: In 1996 Melbourne Water was broken up into a wholesaler and three retailers. We have an operating licence administered by the regulator-general, who produces a report comparing the results in the three main retailers. We use it in our business to provide feedback.
AIM: What was the effect on your people of privatisation?
Cooper: The major change was a move to pricing on a user-pays basis. In the past, the customer got a water bill based on the value of the property; water use did not affect the bill much on an expensive property. Now the amount of water used determines the cost. That has reduced our revenue. It is down to $300 million after the change, from $420 million before.
AIM: How did you adjust?
Cooper: We looked for various economies. The Government took back debt, so we were not paying as much in debt charges. But we are hoping to improve performance levels using less revenue. Our expenditure is $40 million a year on renewing and expanding assets: we don’t want to cut back. The price we pay from the wholesaler has also been adjusted to allow us to run a viable business.
AIM: What were the other challenges?
Cooper: In the early days we had a collection of cultures; from the Melbourne Metropolitan Board of Works, from the Dandenong and Springvale Water Board and from the Mornington Peninsula Water Board.
AIM: What were the differences?
Cooper: In the way people responded to failures in the field. We used the ISO9000 (quality assurance) system to develop work procedures and practices common across the business. We also used ISO4001 for environmental accreditation. And we found the Australian Quality Awards useful.
AIM: Why was this effective?
Cooper: We could look at a number of criteria across the business: the way we respond to customers, the way we use leadership principles, the way we gather data, the way we use strategy and planning. We had a group of Australian Quality Award auditors look at how we were performing on these criteria. We won an award last year. But we were not there just to win an award. We were using it as a business tool to improve performance. We still have areas to improve. But it gave us a strong sense of purpose.
AIM: Is there is a risk that after winning the award momentum will be lost?
Cooper: It is the role of management to make sure that does not happen.
AIM: Many people have reported problems with quality assurance and TQM. Is it something that is more suited to an engineering environment?
Cooper: These are business tools, not panaceas. My first exposure to ISO was at Email. A customer said: “Unless you get accreditation we won’t buy from you.” After I had felt the pressure of having to do it, I said: “Hang on, we are getting pretty good results from this.”
AIM: How does continuous improvement affect morale?
Cooper: People are more comfortable. We survey our staff annually and their satisfaction with management has risen sharply. Many people have gone who were not strong performers. It can be demoralising to a person who is performing to work alongside a person who is not.
AIM: How does a private-sector business compare with a public-sector business?
Cooper: There is little difference. It is about motivating staff and dealing with customers. Our customers range from big manufacturers to mums and dads. All customers are the same: they expect a little bit more tomorrow than they did yesterday.