Or managed luck? I have not hidden the fact that an enormous amount of luck has blessed my work in asset management since the very beginning. But is it blind luck, ( just sheer good fortune)? Or did I somehow manage some of it, simply by being dedicated to making things work and being prepared to take advantage of any opportunities that presented themselves?
I have never been inclined to differentiate, just grateful for it all. However perhaps we should consider this for we all have luck (good and bad) and, while we know that we must take responsibility when things don’t work out so well, we are often far too modest about doing the same when things go well. But, surely, recognising what we did ‘right’ as well as what we did ‘wrong’ is equally important for progress?
Today I have posted Chapter 8 about the fortuitous events that made it possible to transit from a research position with the Parliamentary Public Accounts Committee to a position where I could try implementing some of the ideas we had learnt. All 8 chapters are now available.
Now, looking back over your own successes, why not think about why they happened.
And while you are at it, why not tell everybody in the comments below.
It would cheer us up. And we really need to have some good news now.
In the early 1990s asset managers were so absorbed in the culture conflict between engineers and accountants that we gave short shrift to another conflict, that between scientists and management. If asset managers are now to effectively deal with the climate and environmental issues around infrastructure today this is an issue that we need to address. For this, I don’t think that we can do better than start with the excellent article by marine ecologist, Peter Cullen – also dating from the early 1990s.
In this article, Peter looks at the reasons for conflict between scientists and managers and suggests that there are three major reasons why it is difficult for scientists and managers to ‘get on’
- Friction between scientists and managers is often the result of misunderstandings about the culture within which each works.
- Many of the question that both are trying to solve are value questions not scientific ones or management ones.
- Managers often misunderstand science and expect it to deliver a truth that is nonarguable. They fail to understand the very process of science demands no such truths, so that assumptions, methods and conclusions can always be challenged.
He believes that the answer to this problem is to develop a ‘broking role’ – for people who understand both the scientific and management approach to provide a translation.
His argument about managers expecting science to provide a ‘truth that is non-arguable’ is an important one – and those who are currently disputing the ‘truth’ of global warming would be well advised to read and think about this short but powerful article.
However, I want to draw attention to what he has to say about cultures.
Understanding the cultures
“It is necessary to appreciate that the cultures pervading science are quite different from the cultures that pervade management. Without appreciating these cultural differences we will continue to be frustrated at the inadequate communication in both directions. Within professional ranks there are various mind sets inculcated during training and professional socialization. They can be parodied.
- Engineers don’t care why it works as long as they think it does.
- Scientists don’t care if it works or not as long as they understand why.
- Economists don’t care either way if the internal rate of return is OK.
- Managers don’t know unless someone bothers to tell them.
- Planners know how it should have turned out.”
The culture of Scientists
This includes sharing and openness through publication, conference presentations, travel;
honesty limitations of data/evidence;
emphasis on peer review;
organized scepticism;
peer rewards from quality of insights, experiments, analysis;
peer rewards for ability to select appropriate problems that have intellectual difficulty rather than immediate usefulness;
low status of data collection unless it is to test some hypothesis;
higher status for explanatory theories over empirical models;
some independence about what problems scientists will work upon.
The culture of management
- Managers have as their goal the delivery of benefits to some group. These might be abstract or generalized (policy) or specific (service delivery).
- Managers make decisions in order to reduce risks and they make pragmatic decisions to try to achieve this.
- Decisions are normally made with imperfect information and there is little pressure to review subsequently the assumptions in the light of effectiveness.
- There is often pride in the ability of managers to make decisions with little knowledge, and a culture which does not encourage quantitative evaluation and accountability.
- Technical skills are not directly valued in organizational hierarchies, and professionals have to become managers if they seek advancement to higher levels.
The Source of Conflict
Science is valued as a weapon in the ongoing conflict with other interest groups or agencies for power, influence and resources. Scientific outcomes, and the kudos of success, may be less important than staking out the turf to keep other players at bay. Public sector management appears to be undergoing a paradigm shift at the moment, and so there are two conflicting models.
(a) The bureaucratic model. The bureaucratic model has rules that are made to be followed. Following procedure is more important than particular outcomes. These systems are characterized by due process and formal procedures, rule books, secrecy and avoidance of performance review. The system rewards rule conformity, error avoidance and attention to detail.
(b) The managerial model. The managerial model is characterized by quantifiable outcomes that are more important than following set processes. Services are seen as products to be delivered to customers. There are devolved responsibilities within an externally set cost framework, and managers are assessed through cost-effectiveness reviews. Hence economic rationality replaces the legal and procedural framework of the bureaucratic model. The organization is seen as a tool in the hands of the executive manager or Minister, and is responsive to short-term political agendas. Rewards are for achieving output targets and nonachievement may be punished. Creates an environment where there must at least be a facade of progress, so if a problem is intractable there will be attempts to abandon it so at least the impression of progress can be created by moving on to new and relevant problems” .
What action do we need to take?
As Asset Managers we often get frustrated and annoyed when our ideas of what needs to be done runs counter to what others want to be done. Unfortunately a common response is to consider the others wrong, ignorant or even malicious. But let us first understand what they need to do to achieve their desires and see if we can’t work together.
Your comments?
If you have science colleagues, please share this with them for their ideas for a joint solution.
Footnote; Peter Cullen “The turbulent boundary between water science and water management”. Freshwater Biology, Vol 2. Issue 1, August 1990. He was described as ‘provocative, constructive, brave and always grounded in good science’. Peter was an Adelaide ‘Thinker in Residence’ in 2004. Sadly, he died in 2008. His ideas, however, live on.
The continuing story of Asset Management. It is 1987 and reactions to AM information are mixed.
There was the horror of a board member of the Adelaide Hospital who, when he saw the extent of their future renewal costs, declared “My Goodness, we cannot let the board see this!” A too common response amongst those responsible for management, unfortunately.
But the Under-Treasurer was thrilled when the credit rating agencies saw the asset replacement values as indicative of the State’s wealth (ignoring our future renewal costs), and so we were able to keep our AAA rating.
In Chapter Seven of our Asset Management Story, “Reactions”, I look at the initial impact of the work of the Public Accounts Committee.
There must have been something in the ether in the mid 1980s for, almost simultaneously, major reports on future infrastructure costs were released in the UK, the USA and Australia. But Australia was the only one to focus on managing the costs.
In the UK the focus was on advising the Government of the size and costs of future infrastructure growth. In the USA, the ‘Fragile Foundations’ study included renewal, expansion and upgrade but with insufficient detail to enable these elements to be disentangled.
The aim [of the American study] was to make the figure as large as possible to convince politicians to take the matter seriously. (Later I was to meet with one of the authors of this report, an MP, and when I talked about how we might improve infrastructure decision making, she reacted negatively “If we can’t get the capital projects we want, it wouldn’t be worth going into politics!”)
Earlier I had observed that many in Australia thought that America would surely have discovered and dealt with the asset management problem ahead of us. Well, they certainly had discovered the problem. But they hadn’t dealt with it. And the reason for this is, I think, quite interesting.
America, as a rich country, was used to dealing with problems by throwing money at them, so their focus on the costs alone probably made sense. Australia, on the other hand, had no such illusions. We didn’t expect money to be easily forthcoming and knew that we would need to present a well documented case if this were to happen. We also knew priorities would need to be set. So our focus on management was understandable.
To see more, Chapter 7 has been uploaded today and Chapters 1-7 are now available at
https://talkinginfrastructure.com/the-asset-management-story/
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