Recently at a workshop of asset managers I suggested that the role of Strategic Asset Managers in today’s environment will be to anticipate the changes that are affecting their organisations policies and be ready to address them. I asked them to come along prepared to discuss the key trends affecting their organisation and what they were planning to do about it.
The key trend identified was diminishing or uncertain funding. No surprises there.
What I found interesting, however, was the way that almost all of them were coping with this situation. It was to place a greater focus on the ‘customer experience’ and to broaden the scope of their activities. A university asset manager said that they were seeking to provide staff, students and researchers with ‘desirable experiences’. The airport manager was looking to extend the airport facilities to attract not only passengers and those who came to greet or see them off, but people who would come to the airport for the events or activities it provided, rather than for the intention of flying. The asset manager from the electricity authority said that they now saw themselves, not in the electricity business but in the energy business. He too, saw the need to focus on customer experience. In fact, he recognised that in this new environment that ‘asset management’ and ‘marketing’ had to come a lot closer, for they had a common goal.
Infrastructure management and marketing! An interesting combination.
So my question for today is: Is this the way you see infrastructure moving?
It is a really an interesting perspective and matching with my design for an infrastructure organization asset management model structure from my dissertation. I put three measurement outcomes that asset managers should keep their eyes on them to present the impact of implementing such system at strategic level. The three measurements are: effective organization, efficient organization, and stockholders’ satisfaction. I suggest that asset managers should identify what is under their responsibility and could change in an organization and what is under the government (macro level) and need to have support from it–and what they could do the get the support!
I agree with the statement you have made but it appears you are looking at low level asset management within the business. A strategic asset manager should also focus on the high level business outcomes and part of this is customer experience. They should look at the big picture as well. If the customers don’t like the experience then the business will fail anyway.
Obviously if you have a monopoly or a restricted market the rules may change as the customer appears to have little say in the service they get. But should this be the case???
I agree that strategic AM is about outcomes… which is why, I suggest, we are moving closer to the marketing department as our practice evolves.
I think there’s a growing recognition that traditional infrastructure AM focused on determining the ‘required level of service’ and meeting this in the most cost effective manner (IIMM s.1.3.1) isn’t sufficient: the focal point of any conversations in this context is the ‘backlog’ (projects we need to undertake to meet the ‘required LoS’, but which we can’t afford to pay for) rather than the outcomes we can afford to deliver.
Our language and thinking are evolving because we’re recognising the need for meaningful engagement with our customers and communities about what BEST VALUE looks like with THE MONEY WE’VE GOT (ISO 55000, s.2.4.2: value is determined by the organisation and its stakeholders – this isn’t an unaffordable ‘required LoS’ but the outcomes we can afford, our AM objectives, which must – as per ISO 55002 s.6.2.1.1 – be ‘SMART’).
This ‘paradigm shift’ in AM is bringing us closer to the marketing department because we’re both focused on the ‘value proposition’.
Peter Drucker wrote that “there is only one valid definition of business purpose: to create a customer … It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods … the customer is the foundation of a business and keeps it in existence”.
This quote comes from Stephen Denning’s mind-blowing article “The Origin of ‘The World’s Dumbest Idea’: Milton Friedman”. What I find curious is that Friedman’s definition of business purpose (maximising shareholder value) is unintelligible in a local government context… and on the flip side IIMM’s definition of business purpose (the IAM goal: ‘meeting a required LoS’ that people aren’t willing to pay, hence the backlog) is unintelligible in a business context.
BUT Drucker’s definition of business purpose applies equally to an open market and the monopoly situation of most infrastructure providers. In an open market we’re trying to offer something our POTENTIAL customers will consider to be ‘best value’ (and so create a customer) while in a monopoly we’re trying to offer something our LOCKED IN customers consider to be ‘best value’. The same principles apply.
What’s interesting, then, is that marketing is one of most important skills for infrastructure advisors: we need to be able to communicate concerns about the ‘value’ we can afford to deliver (i.e. why the outcomes we can afford DON’T represent ‘best value’) if we are to convince people of the need for additional funding… if we can’t convince them, then the backlog doesn’t exist (we are wrong about the LoS that’s ‘required’) unless it is accompanied by a residual risk rated as being unacceptable under council’s risk management framework.
So refreshing to read this. It’s my view that infrastructure has been moving in this direction for years, only its been a very slow pace. Glad to see you are now hearing it from the asset managers. It is after all a part of the asset management evolutionary process.
I agree, Sandy, but drilling down further I think the different types of change the asset manager has to deal with are organic and imposed. By organic, I mean the changes that occur naturally through changing needs such as people moving round an office because of changing organisational synergies. It could cynically be described as rearranging the deck chairs on the Titanic. An example in Perth is the cashiers area in the Office of State Revenue. It has space for about 20 cashiers, but these days only one or two is open at any time. I have heard that staff in other areas have been known to come down to work on thorny problems in the quiet of the front counter area. I don’t know how many use that option, but it sounds like a good idea.
The other, “imposed” is when an idea trialed in one place is rolled out to lots of other places, whether appropriate to the individual circumstances. The Centrelink “concierge” approach was trialed in a couple of smaller offices, seen to work for them, and rolled out to all. An office I recently visited had a queue to the concierge that wound around the full waiting area, at least 200 to 250 people. The only difference from the old take a number and wait to be called is that the clients now have to stand up instead of sitting down to wait.
In both cases, the infrastructure was changed: one by usage the other by physical changes to the office layout to accommodate the concierge. Both affect the asset manager (IT for the first and furniture layouts to the second), but to different extents. The application of Wesam’s measurements (which I think are spot on) would be very interesting.