An Innovative Way to Run an Innovation Department with Frank Rogalla, Director of Innovation and Technology of Aqualia

[00:00:00] Piers Clark: Welcome to the Exec Exchange, 15 minute podcast in which a leader from the water sector shares a story to inspire, inform, and educate other water sector leaders from around the globe.
[00:00:11] Piers Clark: My name is Piers Clark, and today my guest is Frank Rogalla, Director of Innovation and Technology at Aqualia. And the topic we're gonna be talking about today is how to be innovative when running an innovation department in a modern water utility.
Frank, brilliant to connect with you.
[00:00:30] Frank Rogalla: Piers, so good to talk to you again.
[00:00:33] Piers Clark: We first met 30 years ago. I was lying in bed last night thinking of you. How weird is that? And it was about 1996 that we met. I was a young gunner at Atkins. You were a slightly less young gun. You're a little bit older than me at Black & Veatch. And I remember you came to visit my offices and the thing I remember was you were driving the weirdest car. It was a sort of square thing.
[00:00:56] Frank Rogalla: Yeah. They called it a popemobile at the time, it was actually Fiat Multipla.
[00:01:00] Piers Clark: And I remember that first meeting with you. I remember finishing thinking, man, that guy is incredible.
[00:01:06] Piers Clark: Now, for the audience, what have you done over the last 30 years?
[00:01:09] Frank Rogalla: I was a swimming champion in my youth and I have not left water ever since. I studied environmental engineering first in Germany, then on a Fulbright scholarship in the US. Then I got hired by Générale des Eaux, nowadays it's called Veolia, and spent 10 years in France, in Paris. They conquered the world and sent me to the US.
[00:01:30] Frank Rogalla: When New York became a little too small for me, we moved to São Paulo and finally James Barnard said, why are you hiding in Brazil? So that's how I came to London, working for Black & Veatch.
[00:01:40] Frank Rogalla: My wife at that time, ended up in Madrid, and her boss was sitting in LA and says, oh, your husband is moving to London. I know a place very close by about driving distance. So obviously from Los Angeles, 10,000 miles away, it looks very close. So, for some time we spent commuting between London and Madrid. So, I racked up a lot of miles and of course, a horrible carbon footprint.
[00:02:05] Frank Rogalla: Now, I'm proud to pay back in some sustainable solutions, hopefully. Once Aqualia hired me now 18 years ago, we've been running this innovation team.
[00:02:15] Piers Clark: So you joined Aqualia 18 years ago from Black and Veatch.
Now, can you share who is Aqualia? Where do they serve and where do they operate?
[00:02:22] Frank Rogalla: Aqualia is a small private operations company. We serve about 45 million people in 19 countries now. We do all the services that a water company or municipality would do: drinking water, wastewater, running the networks. And we also do Design, Build, Operate large concessions in Egypt or in Mexico.
Normally we're just an operator, meaning we don't own the infrastructure with a few small exceptions like the big design build operate, where we have the 25 or 20 year ownerships and then we are owners of the Ostrava water system in the Czech Republic and of the Tbilisi water system in Georgia.
[00:02:58] Piers Clark: Excellent. Thank you, Frank for that.
[00:03:00] Piers Clark: Now, let's get into the topic we're gonna talk about today which is an innovative way to run an innovation department in a modern water utility. And the reason I've chosen you to talk about this is because you have adopted a very unique way of running a innovation department.
[00:03:17] Piers Clark: Talk us through the strategy that you have in Aqualia.
[00:03:20] Frank Rogalla: Well, it was very simple. When I got hired 18 years ago, the CEO said, "Frank, you have zero money, zero people, do innovation." So obviously, I had to invent innovation from scratch and first of all, find money.
[00:03:36] Frank Rogalla: Fortunately, at that time, there was a lot of resources available for innovation. Spain just got into a crisis, actually, just when I got hired and people said, well, how do we get out of here? Only by innovation.
People need less carbon footprint, less energy consumption, cleaner water. So, we did find a lot of support programs for research, both at the local level in the regional governments at the national level, in the Spanish government.
[00:04:00] Frank Rogalla: And of course in Europe, where you had this wonderful framework program for innovation with hundreds of millions being spent. And we managed to get a part of that enormous pie and get us growing in this innovation activity.
[00:04:13] Piers Clark: Excellent. So, I think it'll be useful to work through how you built up that team. You used the phrase there, " we had no one". Did you really have no one? Was it just you?
Were you building it as a one man band team? And how many people have you got today? Get a sense of that scale?
[00:04:30] Frank Rogalla: Indeed, I was by myself, but ofcourse the company existed and everybody was of course, enthusiastic to help. Even though I didn't have many full employees of my own, I did manage to nudge a few colleagues and other departments to get going. Nowadays, we have about 50 people in 12 different locations.
[00:04:47] Frank Rogalla: We of course, also have an innovative approach in that we put our research into the sites, into the contracts. We don't have a centralized research center because there's already a lot of universities and technology center that we can work with using their infrastructure. But our original thing is then to bring the ideas into the field and help them to upscale as a real solution.
[00:05:08] Piers Clark: So you went from no people to a team now of about 50 people across multiple sites. And it's funded through grants that you've been able to tap into from the European Union.
[00:05:20] Piers Clark: And there's a cycle to that. I've known you for many years and I know that you have an annual cycle where you are applying to particular calls and it's a machine you've gotta gear up. Seriously, you can't do this as a part-time job. You've gotta have dedicated resources to doing these grants.
[00:05:36] Frank Rogalla: The commission works in funding cycles. Normally four to five years is a typical project life. Therefore, if you have a bunch of projects, they will eventually run out and you need to apply for the next round.
We are therefore dependent on the schedule. These calls are normally in May, in June and September is the toughest one because in Spain, obviously we shut down in July and August, and yet you have to submit your proposal on the 5th of September.
[00:06:01] Piers Clark: There always seems to be a rush at Christmas or is that when the decisions are made?

[00:06:05] Frank Rogalla: Yeah, normally the projects you had in September are being decided for Christmas and then of course you need to scramble to get your team mobilized.
[00:06:13] Frank Rogalla: Obviously we're not alone. We are working with consultants whose profession it is to write and win proposals. European proposal needs at least three partners from three different countries. In practice, it's more around 10, sometimes even bigger. And that is also a secret to have good partners that can contribute with their ideas and their resources to make a successful proposal.
[00:06:33] Piers Clark: Of course, this is very much aligned with the European dream. It's about collaboration and people working together so that you'd leverage up the skill sets and the capabilities from as broad a church of people as possible. Which is very, very European.
[00:06:48] Piers Clark: And I like that. Let me just be clear, and I like that.

[00:06:52] Frank Rogalla: The UK was actually part of that European system and it's part of it again. And we do have good partners in Severn Trent or in Southampton University or Imperial College.
We appreciate the vision that we can get from different perspectives.
[00:07:05] Piers Clark: Now, I suspect there are people listening to this thinking, that's an astonishing model to do, to have 50 people employed, constant rolling program of grants.
[00:07:14] Piers Clark: In terms of the resources you set aside to apply for those grants, is it three people or 30 people?
[00:07:22] Frank Rogalla: The core management and support is about 10% of our team. Five persons are permanent grant managers and proposal managers.
[00:07:30] Frank Rogalla: We do mobilize, as I mentioned, the consultants or the partners or individual researchers, if the topic is of their domain, they will obviously help to put in technical content into the proposals.
[00:07:42] Piers Clark: And at any one time, I'm sure the number changes depending on which project you're running, but if you were to look at the sum of the projects that you are running today, what's that in terms of euros?
[00:07:54] Frank Rogalla: Yeah. Our annual budget is around 6 million euros. Sometimes they're less, sometimes a little more, but indeed that's about the number that finances this 50 people plus the infrastructure that we build to produce results.
[00:08:06] Piers Clark: Brilliant. Alright, let's talk about the pros and cons.
[00:08:10] Piers Clark: One of the obvious pros is it's a pot of funding that you haven't had to go to your shareholders for. Are there any other pros to this approach that might put this way of running an innovation department ahead of a traditional method?
[00:08:23] Frank Rogalla: First of all, it's of course the constant pressure to find something new because in each proposal, you have to have something that goes beyond the state of the art.
Also, the European ecosystem allows you to gather these new ideas, to be nudged by people from a different background, different country, different challenge, and transfer quickly new ideas to your own system.
[00:08:43] Frank Rogalla: If you're just closed in in your own organization, you don't have this pressure, you don't have this openness to welcome the outside input.
[00:08:51] Piers Clark: I like this idea that because there's a third party that's sort of marking your grant application, you are forced to be that little bit more innovative. You can't be a fast follower. You've gotta be a leader.
[00:09:01] Piers Clark: And then of course that fresh ideas coming from outside your own organization and that being a fundamental part of it. The way Aqualia drives value from this is by being quicker, cheaper, better, faster than its competition when it applies for contracts.
Okay. I've got it. That's the pros. Let's now talk about the cons. What's the downsides to this approach?
[00:09:24] Frank Rogalla: Well, a downside is the risk that there is no continuity because you hire people in the four to five year horizon and therefore there is the danger that at the end they might not have another follow up activity.
[00:09:36] Frank Rogalla: Although being part of a large organization of 15,000 people, first of all, we do have people that hire our own personnel away to the operations. And also we manage pretty much to have a sufficient momentum to keep people employed. And actually they are responsible in part, to find their next job.
[00:09:53] Frank Rogalla: Thanks to the consortium that they're working in, they normally develop also their own ideas and their own partnerships to be successful in the next round of proposals.
[00:10:01] Piers Clark: Brilliant. I think it's a glorious model, Frank, and thank you for sharing the insights in that. It's a very difficult model for other people to follow because you've established yourself as the leader in doing this. I'm in awe of what you've achieved.
[00:10:15] Piers Clark: Now, we normally finish with a slightly cheeky question around asking people to go back in time, but we spoke before we turned the microphone on, and I want to ask you a slightly different question and it's the question of when did you last cry and why?
[00:10:30] Frank Rogalla: Yeah. That's a very, very touching question for me because just last week and up to now I've been crying because my good friend James Barnard passed away on January 27th.
[00:10:41] Frank Rogalla: He was an early inspiration. Actually I read his papers before I met him. I met him then at various conferences. He was the one who called me to Black & Veach, and we were colleagues for seven years and ever since we've been in touch, obviously and celebrating his birthdays. The last one was last year when he turned 90.
[00:10:59] Frank Rogalla: But yeah, I'm still crying. And we are all in mourning because he was such a giant, such an incredible person that had impacts. Whether it was in South Africa where he's from, whether it was in Canada where he first worked in the US, with projects in Australia or in Europe or in South America, everywhere in the world. And obviously he also got honored by the Lee Kuan Yew Water prize in Singapore.
[00:11:20] Frank Rogalla: And now we're trying to honor his memory by raising funds for James Barnard Scholarship.
[00:11:25] Piers Clark: Frank , Thank you for being so open about sharing that. Many of us listening to this podcast will have known James. Like you say, he was a bit of a legend in the field. We, people certainly of my age, mid- fifties, knew him and we lived off his papers in those early days of our career.
[00:11:43] Piers Clark: He was a wonderful man to know.
[00:11:45] Frank Rogalla: Indeed, we all feel very, very touched that we have no longer this reference in our lives, but we're all determined to make him live forever in our hearts and in our minds. And with his scholarship, obviously honor the legacy that he is leaving behind.
[00:11:59] Piers Clark: You have been listening to the Exec Exchange with me, Piers Clark, and my guest today has been Frank Rogalla, Director of Innovation and Technology at Aqualia.
[00:12:07] Piers Clark: Hope you can join us next time. Thank you.