Taking Water and Sanitation Utilities Beyond the Next Level
The Sustainable Development Goal (SDG) for water and sanitation— “to ensure availability and sustainable management of water and sanitation for all”— is a lofty goal. Worldwide, 2.4 billion people remain without access to improved sanitation and nearly 0.7 billion remain without access to improved drinking water sources. Those who have access to water supply and/or sanitation (WSS) services often must cope with intermittent water supply, sewerage system overflows, and poor customer service.
Poor service delivery frequently stems from a vicious cycle of dysfunctional political environments and inefficiencies in water and sanitation utilities. Global forces—including climate change, water scarcity, abrupt changes in the environment (COVID-19), population growth, migrations, and rapid urbanization—exacerbate these challenges and threaten the provision of high-quality and sustainable WSS services, jeopardizing the possibility of providing “water and sanitation for all.”
Therefore, water and sanitation utilities require a new strategic management approach to provide WSS quality services that ensure continuity of operations, encourage continuous improvement, develop strategic capabilities, and create efficient and sustainable strategic business models.
To guide WSS utilities to reinvent and strengthen themselves, the World Bank has developed Utility of the Future (UoF), a program designed to catalyze, materialize and maintain transformation efforts in WSS utilities. The goal is to become the Utility of the Future — a future-focused utility, which provides reliable, safe, inclusive, transparent, and responsive WSS services through best-fit practices that allow it to operate in an efficient, resilient, innovative and sustainable manner. This is achieved through the strengthening of the essential processes of a WSS utility to face their current challenges, and the development of future-thinking capabilities to be one step ahead in a fast-changing environment.
The UoF is a new paradigm for providing WSS services, far beyond what most utilities have achieved—or even aimed for—today. A UoF provides high-quality services in a highly efficient manner while also being innovative, inclusive, market- and customer-oriented, and resilient. The success pyramid illustrates the interdependencies and complexities of a UoF
On the apex of the pyramid is service to customers as the paramount objective of any water and sanitation utility, which clearly depends on technical and commercial operations, though not exclusively so. Other elements required for sound utility management are organization and strategy, human resource management, and financial management. Together, these elements promote effective and efficient commercial and technical operations, while the legal framework and governance in which the utility operates shape its enabling environment.
In a rapidly changing world, success depends on more than these managerial and governance factors. As shown by the orange circle surrounding the pyramid, the Utility of the Future is one characterized by innovation (introducing novel methods); inclusion (improving the ability, opportunity, and dignity of people, disadvantaged on the basis of their identity, to take part in society); market and customer orientation (operating like a firm in a competitive market); and resilience (having capacity to prepare for disruptions, to recover from shocks and stresses, and to adapt and grow from a disruptive experience).
To become a UoF, the utility begins by understanding and learning from its past (successes and failures), continues to challenge its present, and ends by creating its own future. The UoF framework has a methodology to guide and support utilities during this process in three steps:
1. Utility Assessment (learn from the past): assessing the utility capabilities to identify its weakness, strengths and opportunities.
2. 100-day Action Plan (challenge the present): materializing utility’s opportunities with quick wins and a short-term action plan; maintaining the momentum for the utility to continue its transformation process.
3. 5-Year Strategic Plan (create the future): designing a sustainable strategy framework, vision and strategic objectives oriented to become a Utility of the Future.