Infrastructure after Covid-19 – when the mould is broken where do you want to be?

The Covid-19 pandemic has brought about rapid unprecedented change. Companies have responded to imposed restrictions, people have adapted to new ways of working, and the impact on the economy, employment and productivity has been immense.

Businesses face an ever-shifting timescale for recovery but uncertainty on how they need to adapt in the short, medium and longer term.

With uncertainty over the shape of economic recovery, the UK government is under increasing pressure to provide answers. The current political agenda is balancing the risk of further outbreaks against the need to kick-start the economy and get people back to work. Infrastructure is a key part of this recovery plan.

As such, we are seeing a range of statements, commitments and emerging policies that::

• Commit to accelerated investment in infrastructure
• Criticise past failings in the delivery of major programmes which have taken too long and cost too much
• Question how other countries can do it so much better than us
• Recognise that we have developed a huge burden of bureaucratic processes
• Challenge the slow adoption of new technologies and innovation
• Reinforce previous goals on climate change and the environment

The services and facilities provided by infrastructure and regulated industries are essential to the future growth of the economy. The challenge is how to fairly manage the cost of recovery, which will ultimately be passed onto the consumer. This creates further pressure on the whole system including clients and service providers. Some key questions and considerations include:

• With greater pressure on household budgets, customer expectations on service and value will increase
• Customers will be less tolerant of failure and companies will be under greater scrutiny
• Social and environmental conscience is increasing
• As a result of COVID-19 there will be sustained change in the way people work. But is the full impact fully understood?
• Clients or sponsors will be under increased pressure from the regulators to deliver more for less
• Continuing to stretch existing resources and deliver incremental change will not be enough
• Companies will be driven to develop different and more efficient operating models

• No longer contractors or consultants but “Service Providers”
• Has traditional contracting had its day and does it really deliver what clients and customers are ultimately looking for?
• Service Providers will be under the greatest pressure to address the higher-level challenges through creating new ways of working or new service offerings
• “Necessity is the mother of invention” – the time of greatest need will drive the greatest change and the more agile companies will be those that win
• Traditional contracts delivered in a traditional way will become an increasing “race to the bottom” based on price with associated increase in failure

Innovation and technology inevitably has a major part to play in addressing the above.

Regulated industries are notoriously slow adopters. If this is to change, it is essential to understand the reasons why and break these paradigms.

• Risk of failure is too high either in terms of impact on customers or regulatory action
• Procurement processes are cumbersome and often preclude SMEs/Start-ups
• In reality, Intellectual Property has a very short shelf-life, products are quickly copied
• There is more to be gained from running faster and letting others follow compared to standing still and protecting what you have got

With many organisations facing the same challenges, is there something to be learned from collaboration?

Regulation has often been based on the premise of driving or simulating competition. So, what delivers the greatest benefit – organisations collaborating or competing? Many “alliance” delivery models are based on the benefits of collaboration which raises a number of questions:

• Regulated utilities by their nature are often monopolies so why isn’t there far greater collaboration and sharing of ideas?
• Technology/Innovation start-ups often have to prove their concepts several times over to separate clients passing through individual tortuous procurement routes. As a result many collapse before they start. As a wider industry why do separate companies re-invent the same wheel
• Contractors/Service Providers provide similar services to different clients and sectors in the same geographic area. Is there more to be gained from a common approach across sectors?
• If the same Service Provider is providing a service across multiple clients and sectors who is the regulator actually regulating – the Client or The Service Provider?
• If the end service across sectors is a similar service why should there be different regulatory models and different regulatory measures or even different regulators?

The COVID-19 pandemic has had an undeniable impact on organisations. Businesses have been forced to adopt a more radical and agile approach in how they adapt to change.

This unprecedented challenge has also created opportunities. Many businesses have failed but some have flourished. In the main, these organisations have embraced a culture of learning from others. They have collaborated and openly shared resources. They have undertaken the accelerated development of complex solutions and executed them with simplicity.

Going forward, significant commitments have been made, expectations are high and pressure on delivery will increase. The challenges will necessitate change and those that move fastest stand to gain the most.