As a California resident, I am well aware of the current drought. I believe that most Southern Californians are aware of it as well. It's hard not be aware of it on some level though, since it is a frequent news story on TV, the subject of commercials, freeway ticker signs, and billboards. Water bills are increasing as well, which is a monthly reminder to conserve as much as possible. My own water company offered residents in my city $2 for every square foot of lawn that was replaced with something that doesn't need water.
Despite all of these reminders to conserve, I still think that many California residents are not actively making much of a change to their water usage. I believe that Californians are capable of managing the current drought, but I think much larger incentives need to be made.
Possible solutions? A facetious solution would be fewer people (Jonathan Swift's satirical essay "A Modest Proposal" went along similar lines). That's not a legit solution though.
One solution might be to plant more trees. I know that sounds completely crazy, but a specific kind of evaporation that comes from plants is called transpiration. More trees means more transpiration which means more water vapor in the air to condense and then precipitate. Few people are going to buy into that though, so again, not a solid solution.
We could pipe it in from places that have extra water to spare, like the Great Lakes for example. That's a lot of water being moved a long way, which is super expensive and a huge project. Some people have wildly suggested towing arctic ocean sea ice down to California. Again, expensive and time consuming. Plus it doesn't work for 12 months, and I'm sure environmentalists would have huge problems with it.
A current working solution is recapturing water. California recaptures and reuses a tremendous amount of waste water from sinks and showers. It's taken to filtration plants where it is cleaned and pumped back into the grid. It is not put back into the drinking supply but does go to things like public sprinklers. California could ramp up its reclamation efforts.
California is also fortunate to have a lot of ocean at its disposal. Desalination is an option. Many countries around the world do this. Israel gets 40% of its water this way. A problem with desalination though is that it is energy intensive. It takes a lot of energy to filter that water or boil away the water to leave behind the salt.