Managing Change for Increased Innovation in the Infrastructure Sector Exploring a Client's Strategy Implementation

Abstract: Strategy implementation for driving innovation and change within the infrastructure sector is important because the path from making a decision to change to actually reaching the intended vision is complex. A client needs to find strategies for how to stimulate innovation when the client has to go via the contractor during the execution of a project. The contractors are therefore important in achieving the intention of increasing the innovation rate in the sector in general. A client interested in enabling innovation must find and utilise strategies within the relationship with their contractors. That a client should stimulate innovation has been established in earlier research; however, how this could be done is less studied.The client in this study, the Swedish Transport Administration, has decided upon two strategies to increase the innovation rate: a change to procuring design-build (DB) contracts instead of design-bid-build (DBB) contracts, and increasing the number of foreign contractors in the Swedish infrastructure sector. The purpose of this thesis is to explore the implementation of these two strategies — DB contracts and working with foreign contractors — with a focus on the perceived challenges for both client and contractors.The method used has been a multi-case study with 40 semi-structured interviews with project managers, procurement officers, project directors, site controllers, site managers, and project engineers in eight different cases. The empirical data are all from Swedish infrastructure projects with a duration of 1 to 10 years. Some of the cases have been multicultural and multilingual. The findings of this study are that, firstly, the client seems not to have made the transition entirely to the DB contract setting, resulting in a mix between the two contract types. This results in confusion for both the domestic and foreign contractors. The domestic contractors in general have not fully adapted to the new contract type where they are to take more responsibility, and the foreign contractors are more used to the DB contract and therefore feel confused by the client not utilising it as intended. Secondly, the strategy of increasing the number of foreign contractors has been fruitful. There are a number of foreign contractors that have both submitted tenders to the Swedish Transport Administration, and established themselves in Sweden. There are, however, five different categories of perceived challenges that have been identified. These categories are economic, political, procurement-related, social, and project-related challenges for foreign contractors after entering in the Swedish infrastructure sector.The contributions of this thesis are that the client’s role in strategy implementation should be further explored, and that perceived challenges should warrant attention. This thesis focuses on two strategies on how the path towards innovation could look, from both client and contractor perspective, resulting in a theoretical contribution to the client-driven innovation literature, as well as construction management literature. By being aware of the challenges and that changing the project delivery system is more than changing the name of the contract, a client could ease a contractor’s situation and therefore enable them to focus on innovation and improvements.