Closing the capability gap: Strategic planning for the infrastructure sector

Abstract

In order to cope with arising challenges in infrastructure sectors, utility organizations must develop new strategic, organizational, and technological capabilities. Public utility service providers have often been seen as lacking the capacity to identify and/ or implement the needed transformation processes. Instead, privatization has been proposed as a panacea to remedy this deficit. However, privatization projects are often not realized because they encounter strong political opposition. This article presents the results of strategic planning projects in three public wastewater organizations in Switzerland. This study suggests that if appropriate processes are implemented, public utility organizations are able to overcome their limitations in identifying the relevant capability deficits and select adequate strategies to compensate for the deficits. While these strategies may deviate substantially across utilities due to differences in the goals pursued, the widespread adoption of strategic planning methods by public utilities represents a viable alternative to privatization.