More than a decade ago, Chris Lloyd and Charles Johnson wrote in the Seven Revelations of Asset Management that we must “embrace uncertainty”.
This year we want to build on good practice to help our profession do this.
Let’s cut to the chase: our role as asset managers is to develop plans for the future, and yet the future, even next week, is uncertain. (Particularly at the moment.) We can’t not plan because we don’t know everything. In fact, uncertainty makes it even more essential to have plans.
Chris and Charles were right: we have to leap in.
It’s better to be roughly right than perfectly wrong. And there is no other option. Aiming for certainty is how we would ensure we are adding little value to asset decisions.
Board member Todd Shepherd has worked in North American power and water to develop a better approach to infrastructure risk and uncertainty, based on good practice in other professions and sectors. It’s not about a new tool, not software, but a more fundamental understanding of what managing uncertainty requires.
It requires not even trying to get a perfect answer.
Because the cost of perfect information is infinite – impossible. And good decisions don’t need it. What’s needed from us is practical ways to reduce our organisations’ uncertainty.
We’re currently drafting a much longer piece about how we make better decisions through better estimating and grasp of probabilities. And how it is, in the end, easier to deal with uncertainty than some of the weird things we do in infrastructure at the moment.
Are you in with us?
(We’d love to hear from you on risk.)
The risks of asset failure are subserviant to the risk to the service if the asset fails. Built in redundancy can cover when assets fail but if the service fails because of the asset that then is a corporate failure. A broken pump may cost twice as much as the regular maintenance or timely renewal, but the cost of getting the pumped product to its destination could be horrific but will not be recorded against the asset failure.
And we shouldn’t renew or replace assets without checking with the service managers first.
Planning for the future is a full-time occupation, as it is constantly changing so to we have keep updating plans and if this is part of the AM team remit then that team needs to be able to do it. The risk of not keeping plans up to date might be considerable, adapting to change be they economic, technical or procedural will be essential in reducing risks, especially of obsolescence. More importantly the organisation needs to be able to adapt to these changes and the changes in planning outcomes to be able to cope with these risks. The current AMP might quickly fall out of date as a result of changes and we cannot rest on the laurels of a five-year plan.