Open for business again

Sorry for long absence, I’m not dead, just been otherwise engaged.  I am currently writing ‘The story of Asset Management: the first ten years’ (1984 – 1993) and as I read back through my old journals, it is easy to see why asset management has captivated me for so long and I thought some of the stories might captivate you, too.  For example, try this:

1988 Scene: NSW Parliament House

In 1988 I attended a very heated debate on accrual accounting presented at the NSW Parliament House for elected members and selected others. It was memorable for a fight that almost broke out in the house. After much discussion on the pros and cons, one section of the audience was showing considerable disquiet. Eventually one of the group, a politician, stood up and angrily and loudly stated “If you reveal accrued liabilities we will be forced to do something about them”.

At this, the accounting professor on the platform, Bob Walker, replied neutrally “Accrual Accounting is simply an accounting system, it provides information, what you do with the information is up to you”. This was too much for the highly agitated politician who shouted “You’re just like Pontius Pilate, washing your hands of the whole affair”. Cheers broke out from that section of the audience.

What can we learn from this?

Now the academic was correct, if naive. It is true that accounting systems provide information that enable but do not enforce action. However awareness of information can be a propelling force to action, which the politician instinctively recognised. It is the old ‘ignorance is bliss’ argument, if no-one knows something needs to be done, then you cannot be blamed for not doing it. Once the facts are in the public domain, though, they may be far more difficult to ignore.

The information we develop as asset managers also presents imperatives to action – after all that is why we research, analyse and develop it. So we must be prepared for, and learn how to deal with, reactions like that of our angry politician and not go into the fray unaware. Yet how many times do we do precisely that?

The way in which our data or facts are presented is important, too. There may be no difference – in point of fact – between the glass that is half empty and the one that is half-full but the connotations are widely different. The truth is that facts can never ‘speak for themselves’. The language they speak and the message they give depends crucially on the way they are organised and presented. And this organisation and presentation is what politics is all about – influencing reactions. This is as true of internal, departmental politics as it is of larger scale national and international events.

We have developed a poor habit: decrying something as ‘just politics’ as if by doing so we can ignore it. But everything is politics! Better to learn how to play the game. That is, the game of presenting our information in such a way that the reaction we get is the one that we want.

It doesn’t happen by accident.

One Thought on “Open for business again

  1. Adeyemi John Falade on April 20, 2021 at 3:45 pm said:

    I can’t wait to read the book, Penny.

    I completely agree that the way you present information depends on the story you are trying to tell and to whom you are telling it.

    In selling the idea of developing an asset reference plan in the earlier days of my AM career, I used a different set of slides for each of my focus groups. To the leadership, I emphasised “RISK’, and threw in a few statements about likely fatalities and production loss if we don’t get on it now. To the technical crew, I made sure there were enough charts and intimidating mathematical squiggles to assure them Asset Performance will attain undreamed levels of availability. To the financial crew, it was all about tracking asset Costs. (Accruals & depreciation, roll-up costs, one-stop budget shops using activity-based cost models etc. At the end of the day, we all agreed we needed an Asset Reference Plan.

    You have to present AM information such that your target audience sees the inherent ‘personal benefit’ or ‘Value in buying into your story, making sure to throw in a few ego massaging anecdotes along the way.

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