In the last post Jim Kennedy, Asset Management Council, looked at what it took to construct a ‘defensible budget’. He argued that stakeholders (customers, community, government, employees) are everything but he wondered whether organisations really understood what they were promising. In other words were they really clear about the consequences of their decisions and promises made?
Capability to deliver
For example, had they turned these promises into the capability to deliver (technology, plans, people, facilities, information systems, logistics, support systems).
This has two aspects: there is an ‘enabling or inherent capability’ and an ‘organisational design, or organisational capability’. In other words, the equipment may be able to deliver, but has the organisation the right people in place?
Studies have shown that where someone was sent in to fix a problem who did not know what needed to be done, was not familiar with the asset or problem, or was not fully competent to do it, the level of competence was only 50% . This led to the job needing to be done 5 (!) times more often than if a competent knowledgeable person had done the job initially with 100% competence.
But what is the organisational implication of this? To ensure that you have the right level of competence ready when needed, you have to have highly competent (and thus well rewarded) people under-occupied so as to be available when needed. As we cut back on training because it is expensive, and aim to have everyone fully engaged all the time in order to ‘achieve efficiencies’ – what is the real cost? If we cannot demonstrate the benefits of organisational capability in a ‘defensible budget’, costs will increase and quality decline.
Comment?
I prefer to talk about ‘sustainable best value’ rather than a ‘defensible budget’, but I like the emphasis on ‘organisational capability’.
I’m sure this issue is lost in the current context in NSW councils: they must develop a ‘resourcing strategy’ that considers the finances, assets (infrastructure) and workforce needed to deliver on objectives, but ‘organisational capability’ (at least the elements in ISO 55001 – people, systems, information, technology) aren’t clear.
Asset strategies include an improvement plan and workforce plans talk about training and staff needs but ‘organisational capability’ deserves equal billing: you can have plenty of money and great infrastructure, but you won’t deliver sustainable best value without good organisational capability! What can happen, then, is that the community is asked to pay more for better infrastructure while organisations aren’t pursuing efficiencies to avoid rate rises.
Interestingly, the comment in the last post about O.C. that it “takes years of consistent management attention and good leadership” applies equally to infrastructure!